THE CITY OF LONDON LOVES INFINITE REHYPOTHECATION

Is this in our national interest, numbnuts?

Infinite rehypothecation?

This is when a bank lends money to a borrower and the borrower puts up some collateral for that money. But then that bank can use that collateral in an infinite number of transcations which allows that bank to borrow money from other banks or sources.

So having the power to create money out of thin air is not enough for them. The money for the initial loan, so the bank gets its grubby hands on the collateral, is created out of thin air. But then if that bank goes to another bank using that collateral asking for money in an infinite number of transactions then the other banks creating the loans accepting the collateral create the money out of thin air.

Thin air on top of thin air on top of thin air etc...

And who owns the collateral?

And who bails them out if it goes wrong?

And who keeps the profits if it goes right?