OOPS!
Yoiu asked me I meant by “fritter away” in the above quote
I answered your q about this the wrong way. In an earlier post I explained what “fritter away” if Glass Steagal WAS repealed.
Now I see you were asking what I meant by “fritter away” if it WAS NOT repealed, and deposit banks could not make investments.
The answer is “who knows?” When the gov prints tons of new money, there is no telling on what foolishness it will be spent. At one time in France it was on worthless land in the swamps of Louisiana. At another time in Holland it was tulips. In the 20s it was stocks, in the 90’s it was dot.com stocks. Lately it was home loans to people who can’t possibly repay.
But there is one common theme: The buyers don’t actually need what they buy, or think it is really useful, but plan to sell it off to the next sucker. It works well for a while [the boom], till we run out of suckers [the bust].
As for your latest post, does “DEPOSIT INSURANCE byt FDIC = monetizing government debt to pyramid more credit”. No it doesn’t. Deposit insurance by FDIC was passed in 1933. The article by Lew Rockwell is talking about a law in the 90’s.
DEPOSIT INSURANCE byt FDIC = the gov promises to help the individual little guy who put his money in the bank. If the bank loses his money, the govwill give it ot him. Of course this is much more of a help to the bank. It means if they make foolish decisions and lose the depositors money, they have nothing to fear. So from now on they don’t have to think twice before using the little guy’s money.
monetizing government debt to pyramid more credit= something I explained at length in a previous post.