… A New banking paradigm arose the more you borrowed led to more loans led to increased share price led to lower cost of borrowing led to higher pound. And so the great “housing bubble” “debt bubble” was orchestrated and conceived simply around overnight borrowing and the Yen carry trade. Did I mention who was buying those shares in the new banks? Yes you got it the very same “investment banks” who were lending it money. The money was on a merry go round! The investment banks were printing bytes and paying themselves for that with the wealth of savings in those new institutions (the pre demutualization savings) until all the savings were gone to pay interest on fabricated byte money. [1]

Astute Doomers may have already recognized the similarity to this quote we recently borrowed from Neil Stephenson’s fictionalized description of the 1690s London Goldsmith’s Crisis.

… "You mean to tell me that the coins being stamped out at the Mint are, the very same night, melted down into bullion on Threadneedle Street?" …

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[1]: "The Banking Crisis, What Really Happened from 2001 to 2007", Market Oracle, March 13, 2009.