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« Last post by Mustang19 on April 08, 2024, 11:10:24 pm »
Now that the thread hasn't been deleted, i will explain further.
The Basel capital requirements guarantee capitalism will collapse. Capitalism is zero sum. A pays b 100, b pays a 99, a pays b 98 etc. It's a pointless ideology.
If the tax rate is 2%, home prices grow 2% a year. You're not buying a house, you're buying the sellers debt. Therefore any system of capitalism necessarily has to inflate until it collapses because houses can never be sold for less than the seller paid for them, and the rate at which the seller accumulates expenses sets a floor on home price growth.
The Basel requirements began in 2019. In 2008 the money multiplier was in the hundreds and reserve requirements didn't exist. A reserve was passed in 1980 in the monetary control act and repealed in 1992. Since then savings accounts and certain limited account types have had reserve requirements, regional banks were created to avoid them under the 25m cap, and banks otherwise completely ignored everything.
Now that capital requirements exist banks must necessarily collapse because the fed isn't printing money whereas home prices must always increase. At the moment m2 is actually falling. The Basel requirements capped everything at 2019 levels and everything almost collapsed then. However covid created lots of free money that prevented collapse. Fujairah oil inventory was also zero and the Jewish bioweapon saved it.
Covid delayed the collapse by six years. When it happened the money multiplier was 10 which fell to about 7 from the ppp loans. The ppp loans are also being clawed back for fraud which is an additional reason capitalism collapses.
In any case, besides the aforementioned large amounts of deaths among illegal immigrants, the main issue at the moment is increase in the multiplier. Because banks have contracted lending m2 is actually falling. They aren't selling homes and let existing ones get paid off, because everyone is homeless now and mortgages don't matter. The number of people moving has increased due to the remote work chaos but home sales fell, which just means there's tons of homeless people. In December i sent an email to the federal reserve about all this and this caused powell to become "hawkish" and make extreme statements about reformulating Basel and so forth.
Europe doesn't have real mortgages, it has ARMs with very generous terms like automatic refinancing and no actual enforcement of rules. In Europe's case, the liquidation of American banks would send their European holdings into receivership and cause them to fail anyway. They will get rugpulled.
In America home prices are continually increasing simply as a mechanical function of tax and interest. Home prices will keep increasing. The average person is unable to buy a steak every day, pay rent and healthcare anymore. The average person is about 500 negative per month meeting basic expenses. Their credit limit is a few thousand so defaults have to increase.
All gains in consumer income are being swalled by rent. The cpi is irrelevant because nobody is actually paying rent, instead debt payments are mounting and eating income. Retail sales are falling due to inability to buy anything. Retail sales are the only discretionary part of income that means anything. The rest of income goes to "rent" which is impossible to record because it is all debt collections. The income people have in their bank account is disconnected from their official income and inflation statistics because of debt collection. Retail sales is the best measure of discretionary spending and it is falling. Landlord income and collections is another measure of income if you subtract it from total income.
So, the multiplier based solely on the ratio of m2 to m0 minus currency in circulation has hovered around five to seven for the past few years. Debt defaults are increasing which pushes it lower. A 10% debt default would almost automatically destroy any bank reserves any system would have. If the available capital is already 70% utilized, a multiplier of 7 out of the 10 or so Basel allows, you need a 3% default.
The Basel requirement is the ratio of deposit liabilities to retained earnings. It's about half the balance sheet cash, because most of that is in check processing and not available, divided by deposits and bonds. Because banks printing money adds to deposits this brings the system closer to collapse. Base money creates retained earnings by paying back banks losses on treasuries. What the fed is actually paying when it buys treasuries is the money the bank spent on treasuries to fund government employees that paid mortgage interest. Fiscal policy creates money, and monetary policy only pays banks back for what they sunk on treasuries.
Money is created when government employees pay their mortgage. When private employees pay a mortgage it's from the banks own salaries and capitalism can't actually work that way. Banks finance cars, houses, and their own expenses which are the entire private economy, and the private economy by itself isn't capable of creating bank earnings. The only reason capitalism exists at all is that the government spends a deficit that creates bank earnings. Even if America runs a budget surplus in a year, foreign corporations are buying American cars and the banks in those countries are using profits to fund America. If the governments of the world ran a budget surplus in total in any year the world would collapse because the loss of consumer income would destroy mortgages.
The 3% total default rate on all consumer loans is a definite point that will happen and capitalism will collapse. On January 1 2024 it was already in default and given the 980 days needed for foreclosure plus a 40 day notice to quit, capitalism collapses on September 17 2026.
As i continue to not be banned i will go into increased detail.
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