25 October 2013 (23:41 UTC-07 Tango 24 October 2013)/20 Dhu’l-Hijja 1434/03 Aban 1391/21 Ren-Xu (9th month) 4711

“…it’s important to demonstrate that both the level and the quality of the capital is there, uh, before the, uh, a crisis emerges.”-Thomas J. Curry, U.S. Comptroller of the Currency, speaking to CNBC’s Nightly Business Report (which airs on PBS)

Yet again, the Federal Reserve Bank is ordering big banks to increase their cash, bonds and assets reserves.  The Federal Reserve ordered an increase in cash reserves back in July.

To give you an idea of what the Federal Reserve is fearing, Too Big to Jail banks are being told they need enough cash on hand to get them through 30 days of “market stress” or “credit drought”!  Small banks now need 21 days of cash reserves.

But don’t blame the Federal Reserve for fear mongering, it was the U.S. Congress and the international Basel Committee on Banking Supervision that ordered the move!

Chairman Ben Bernanke said the reserve levels now being required are more than what’s being required for European banks.  However, at the current European Union summit increasing bank cash reserves there are being discussed.  More signs things are gonna crash.

Regarding the term ‘credit drought’, ironically, ordering banks to hold more cash in reserve will result in even fewer loans to businesses and individuals, which is a major driver of the economy by enabling them to buy stuff.  So wouldn’t this move cause a credit drought?  The credit drought the Federal Reserve is afraid of involves the availability of easy credit for the Too Big to Jail banks, not you and me.