U.S. weighs backing bank debts and deposits

October 10, 2008 by · Leave a Comment
Filed under: Industry News 

I think we should really think about what implications this can pose for the U.S. citizen and our credit on the world stage if we open ourselves to this exposure of potential risk. When you talk about covering the bank debts then I would assume you are including all of the DERIVATIVES they have exposure too that now number over $500 TRILLION dollars according to the Bank of International Settlements (BIS).

U.S. financial institutions were the biggest players in this market. What do you think is so large that is has caused the global financial system to breakdown and would stop banks from even lending to each other? If they are proposing to “make good” on these then where do you think the U.S. dollar is headed if we have to issue trillions of dollars to keep these failed bank a float? The amount of price inflation we will see if this type of money goes into the system will be unprecedented, period. Please help us.

Press Release:

The U.S. government is weighing guaranteeing billions of dollars in bank debt and temporarily insuring al U.S. bank deposits, in a bid to unfreeze bank lending and staunch massive losses in equity markets, The Wall Street Journal reported on Friday.

The New York Times reported that U.S. and British officials were converging on a similar blueprint to stem financial chaos involving injections of government money into banks in return for ownership stakes and guarantees of repayment for various types of loans.

On Wednesday, Britain said it would inject 50 billion pounds ($87 billion) of emergency capital into banks left reeling by the global financial crisis and extend 250 billion pounds in guarantees to help them refinance senior debt.

The British concept to expand its proposal to other countries has a lot of support from Wall Street and is being pored over by U.S. officials, the papers said.

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