What can you do with 700 Billion? You could get the rescue of the American financial system under way or:
- You could buy houses for about 3% of American households.
- You could buy 1/3 of the assets of Citibank.
- You could pay for every American's Unemployment and Medicare benefits for 11 months.
- You could be the EU for 19 days.
- You could pay for the world's oil consumption for about a day.
Most folks are not used to dealing with numbers that big. I know that I'm not. But it's not the biggest number, and nowhere near the biggest number that the world of finance deals with. The FDIC, for example, estimates that the assets on deposit of the US banking system is about 11 Trillion. And with current banking rules, those can be leveraged 10 to one. Which means American banks (not including investment banks) could conceivably manage 110 Trillion of credit.
110 Trillion of credit in the US represents a whole lot of trust. Do we trust each other that much? If we don't, then the whole system can come crashing down. The fact of the matter is that we have indeed been trusting each other that much, without much thinking about it - in fact laughing about it. Now suddenly everybody is serious. Or are we?
If the shit hits the fan, we just live like slackers, for 20 years. No promises of fidelity so that we live up to expectations - just no expectations. No credit where credit is due. But you already knew this.
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