I posted this on my FB page.
This is an exercise in applied logic.
From ZH we have this – http://tinyurl.com/guv27yu – and of course bankers want to pay their bills like everyone else.
“If I don’t issue more loans, then my salary isn’t enough to repay the mortgage, and car loan. It’s not difficult to issue more loans, but lets say in a years time when the loan is due, if the borrower defaults, then I wont just see a pay cut, I’ll be fired, and still be responsible for loan recovery.”
The whole system runs on debt and must expand else collapse. Two and even three job incomes, stagnant wages, and increasing burdens are not healthy. Artificially raise wages (min wage) and prices soon follow to cover. No one has really ever moved up the ladder when working at the minimum wage. Tomorrows $15 minimum will also be $16 going to ~$23 and milk will cost a buck or two more. It’s all smoke and mirrors playing on peoples fears and emotions. The market will force the ratios to what the market demands they be. Only so much debt can be serviced. Looming on the horizon are default after default. Mr. Banker, above, knows this. Banks need money, he needs his salary, and the money must come from somewhere.
The consumer always pays for everything.
It’s getting harder and harder to pay many bills in cash. Some, like water, can be local so one can pay in cash. Many require a bank account.
From ZH – http://tinyurl.com/zjgs9m5 – as to Japan…
“if the negative interest rate continues for longer or goes deeper, commercial banks may have to set negative interest rates on deposits, which would expand not only the tax on commercial banks, but also on depositors (households and companies). This could lead to a ‘silent bank run’ via a shift of deposits to cash (banknotes), which in turn damages the sound banking system by enlarging the leakage of funds from the credit creation mechanism in the banking system.”
Heard the rumblings about going ca$hless? Remember, consumers pay for everything. Buckle-up folks. The ride is only beginning, and it won’t be an event. It will be a process, lasting years if not decades.