Are the Big Banks Faking a “Liquidity Crisis”?

George Washington’s Blog
September 27, 2008

I previously pointed out that when the Japanese government threw cash at their big banks in the 90′s, the banks just horded the money instead of using it to restore "liquidity".

Well, a professor of economics and an expert in liquidity now hints that the entire liquidity "crisis" might be a hoax.

Bloomberg quotes the good professor:

"I suspect that part of what we’re seeing in the freezing up of lending markets is strategic behavior on the part of big financial players who stand to benefit from the bailout,” said David K. Levine, an economist at Washington University in St. Louis, who studies liquidity constraints and game theory.

Are the big banks faking a liquidity crisis because they know that if they act like the financial system is drying up, they’ll get a big bailout?

Like a kid who pretends he’s sick so he can play hookie from school, are the big players pretending they are financially "sick" so that they can play hookie from the free market?

9/11 Chronicles Part One: Truth Rising Get the DVD and make copies or watch the high quality streaming and download version online at Prison Planet.tv. Click here to read more about the film and view sample trailers.

  Print this page.

Comment Rules

Comments are closed.