Bernanke wants to lower reserve requirements, Obama wants to increase Fed's regulatory power

This shit is disgusting. How can anybody be fooled by this? We have the Fed chairman wanting to give banks the authority to write credit out of literally nothing. You have Obama wanting to give the Fed more regulatory authority. You have the Congress wanting to pass health care that raises prices and forces people to buy insurance. What the fuck is wrong with people?

If the reserve requirements are lowered like Bernanke wants, banks will be able to create unlimited credit. That means they have nothing to lose if a loan goes bad. In fact, they have everything to gain! Think about it. The bank puts up nothing because there's no reserve requirement, and they get whatever is pledged as collateral if the loan goes bad. It allows them to gobble up real world assets at an even faster rate!

There needs to be a 100% reserve banking system, not this insane fractional reserve banking system. All that fractional reserve banking does is allows banks to grow larger than they should, because they're not risking anything. For more info on the fractional reserve banking system, check out Money as Debt.

Raw Story:

US President Barack Obama on Saturday urged senators to grant the Federal Reserve a dramatic expansion of its regulatory powers and to establish a new consumer protection committee to help safeguard Americans from Wall Street's excesses.

[...]On Monday, the Senate banking committee will debate a proposal by Democratic Senator Christopher Dodd that is designed to halt what he sees as abuse and excess by financial firms.

Dodd's bill would empower the Federal Reserve to conduct oversight across the financial sector, putting insurance companies and even smaller lenders under their sway.

Federal Reserve Chairman Ben Bernanke has disclosed in public that with the bank's expanded framework, it assumes the coming elimination of "minimum reserve requirements" for banking institutions.

Unhinging banks from even basic deposit standards would essentially create a class above the daily requirements of capitalism, resting atop a pool of funds with infinite depth, removing the need for what's currently known as "fractional reserve banking."

[...]Only a few other nations have removed their reserve requirements, including Mexico, Canada, Australia and the United Kingdom. (I don't know how these countries haven't collapsed. If you have no reserve requirement, it means you have nothing backing your loans. If our banks can do it, they will do it. If they're big enough and they collapse, they know they'll get bailed out by the government)