Long enough to find out that the wherewithal to pay it back, from those it on-lends it to, is not forthcoming.

Or even third-coming.

Someone should tell these folk about planetary physics, and what finite means. Lesson two can be on exponential growth, and doubling-times. Third can be on how Malthus was correct all along, and that it's only 'Moore's Observations thus Far'.

No way will either the bank, or it's customers, ever 'repay' the 'debt'. We are past the cusp.

Although you have to question the authenticity of what exactly underwrites - justifies - the loan in the first place.

When the music stops (for good) you may not want to be carrying the parcel.

Or maybe it won't matter at that point. (hey, they could hedge their bets)

Still, no worries eh? They've been there before, as I recall.

Look at the killing they will make if inflation takes over in Europe.

I am trying to get my head around something here...

In terms of inflation, if its pull because there is too much $ as the driver....the Bank then rises the OCR to remove money, this makes sense to me. If its push though, ie goods rising in cost because the inputs (raw materials and oil) to the manufacturing process are going up, sure raising the OCR takes money out....plus the money taken out as goods are more expensive.....a double whammy....so for me with energy no longer being a trivial or marginal cost but actually the main driver of cost of goods indeed the economy then varying the OCR is a dead duck....rising inputs ie oil is going to do the work of rising the OCR and then some....we can see this from the crash of 2008/9....

Does anyone not agree that the OCR is a dead ducK? and give reasoning?

regards

@ Ian,

That's what happens when money is made too easy to get. Too much is lent into existence and it follows virtually by definition that much that was lent will be lost. This results in far more pain in the contraction than there was pleasure during th expansion.

You can easily missallocate lots and lots of money and create full employment for awhile. You can kick the can down the road if the government is willing to take over where businesses left off but when The Piper comes knocking you better watch your children.

Why is this so hard for economists to understand?

try this for an interesting exercise, google search (any NZ bank) bonds issue,

and this
http://www.google.co.nz/#hl=en&safe=active&rlz=1R2RNWN_enNZ347&q=increas...

check out the revolving debt loop of doom.

total bonds in existance now reached $85 trillion dollars!
go to what is still the real home of the international banking scam and scroll down to bond market report, takes a while to download, probably designed more for big bandwidth high speed internet users:
http://www.ifsl.org.uk/output/Reports.aspx

Hang on NA...isn't that 1144 ooo ooo ooo ooo?