Quote:
Originally Posted by DaiNasty
So apparently the banks 'create' money on the books from nowhere. Their gain comes from the interest due on this imaginary money.
If that's the case surely it could be un-created just as easily, leaving just an agreed and hopefully much-reduced interest fee payable as settlement.
|
Sadly not, they insure this money against default, and they use the money stream from the lending of this money in securities.
http://en.wikipedia.org/wiki/Securitization
Once this stuff is created it's quite real and can't be made to disappear unless someone is prepared to purchase the securities / bonds and tear them up.