[Peace-discuss] The money was there yet again

[Bob Illyes]

Somehow I wrote "raise takes" instead of "raise taxes". Sorry!

But perhaps I should explain a little more for those of you not familiar 
with the Fed's tricks. Banks are allowed to loan more money than they have 
in deposits. The maximum degree of this "leverage" is set by the Federal 
Reserve. The Fed can change this rate and thereby radically increase or 
decrease the amount of money available without any adjustment of taxes. 
Heady stuff, and quite dangerous if you aren't careful. The current mess 
with the "investment banks" is partly due to their being unregulated, and 
foolishly using preposterous leverage (33:1 for Bear-Stearns). This money 
was literally created out of nothing (and has returned to nothing).

Bob