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Re: Is reccession in America about to start?
Loaners can't loan if savers don't save... usually.
But then the loan companies started to loan more and more off each other... buying debt.... and once that debt turned bad (when people who had loaned beyond their financial means were unable to make repayments) the stuff hit the fan.
Voila Northern Rock.
The banks are taking too big a cut of the profits and not rewarding the savers enough, so their cash supply is drying up.
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