That's the nice formulation of what's been happening since 2008 in banking from Mish today, here, taking inflationists like Michael Pento to the woodshed:
The simple fact of the matter is Pento has no idea how bank lending works in the real world.
There is no other way to state it. If banks thought they had good credit risks, they would lend (provided of course they were not capital impaired).
Moreover, by paying interest on reserves, Bernanke is slowly recapitalizing banks over time. Would Bernanke easily give that up? Well he hasn't so far. Nor has he even dropped a hint of it.
The Federal Reserve can talk all it wants about fulfilling its too many and misguided missions, and it does so, incessantly, and I would say purposefully in order to divert your attention from the real mission. Nor is this done without the full approval of the political class in America, which profits from the arrangement.
The one thing you can be sure of is that the one mission the Federal Reserve has is to watch out for its own in the Federal Reserve banking system. Recapitalizing the banking system whose failures have cost the banking industry north of $88 billion is the Fed's #1 priority.
Our country is of the bankers, by the bankers, and for the bankers. If you can't find work or refinance your house, dat's tough, Anwar. Dhey are on a meession from Gad. The banks must be saved at all costs, which is why the taxpayers are on the hook for everything in the Fascist States of America.
Who is recapitalizing YOU?
