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mattenthehat t1_jddy6tf wrote

Reply to comment by Aarschotdachaubucha in 4 Trillion dollar corrective response by Theorysquatch

Right, and the new bank will just deposit it back at the fed, not loan it out or buy treasuries, right? ...right?

The whole thing just adds a layer of obfuscation.

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Aarschotdachaubucha t1_jde5pbr wrote

They literally can't. The new bank is using it to meet capital requirements in a tight market. The fear that other banks are failing might infect them makes them not want to lock up funds in investments.

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mattenthehat t1_jdegsjx wrote

Shouldn't or can't?

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Aarschotdachaubucha t1_jdehz9n wrote

The "can" scenario involves them getting bailed out then immediately killing the tool that stops them from being insolvent. If they want to suicide, they can just do nothing for the same effect.

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