RE: Stock-specific or sector ?6 Jan 2026 14:30
Hi fencesmasher,
Fractional reserve banking-
If you deposit £1,000 into a bank, the bank can keep £100 as a deposit and lend out your other £900. In effect increasing the money supply. This fuels the economy, but when things start to wobble and defaults increase the banks cannot come up with the money to replace your deposit.
There’s a reason why the media squash any story’s of defaults fairly quickly like in the U.S. a couple of years back. They cannot afford for the reality of the situation to get out, a run on the banks would be apocalyptic and when people realise how much of a reality that is they would go to the bank tommorrow and withdraw everything. Hence why gold is climbing so high and never rolls back.
The only way to keep this going now is keep inflating and keep selling mortgages by any means necessary, help to buys, zero deposit mortgages, 50 year mortgages in the US.