Mike Shedlock

was asked a few days ago by Zócalo Public Square, a not-for-profit daily Ideas Exchange, to contribute a brief comment to coincide with their upcoming event "Can We Fix What's Wrong With Banking?"

I was specifically asked to address the question "should we have bailed out the banks?" Here is my response:

No, we should not have bailed them out. That’s the easy question.

Now that we have bailed them out, however, here’s the important question: "Will we fix what’s wrong with banking before there is a global currency crisis?"

??On that score I have my doubts. ??The simple fact of the matter is we have a massive mountain of debt everywhere you look: Federal debt, State and local debt, student loans, housing, unfunded liabilities in Medicare and Social Security, and untenable pension promises at every level of government.

Most agree that is a problem. Unfortunately, that’s where the agreement stops.?? Yet, before we can address the debt crisis, we have to understand how it happened. ??

The source of the debt crisis is two-fold:
 

  1. Fractional Reserve Lending
  2. Fed (central banks in general)

Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.
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