I was reading this article in Athens News and it struck me
Going back to basics.
Banks are supposed to use your savings to lend out to other people in order for you to get paid interest on your deposits.
But things have been completely turned around
“remaining a private bank after the recapitalisation of the Greek banking system to be completed next year.”
We now have parties in massive debt (governments) and people & businesses (who have to service the governments massive debt as well as their own debts) going through a massive recession giving money they don’t have to banks whose purpose is to give the money back to the same people in the form of loans to help the economy.
Does this strike anyone as something utterly mad?
Are governments, with their bank recapitalisations now saying that people need to get into more debt (through loans to government and onto banks) in order for banks to decide where the people’s loan should be spent, so the economy can be put in a better position?
Does this strike anyone as a complete racket?
Banks are lending money to government at interest, in order for the governments to give the money straight back to the banks.
Does the simply huge moral hazard strike anyone as something dangerous?
If banks are getting bailed out because they are so big what incentive do they have to run a healthy operation?
The bailouts they are getting from government are massive and are arguably bigger than the loans they would make to customers. The bonus of lending to government being that the people have to pay back the debt and if they don’t the government can put the people in prison.
Does this strike anyone else as fascism run-amuck?