When banks reduce lending due to increased risk perception, the money supply contracts, creating downward pressure on the monetary aggregates (M1, M2), which in a debt-based system where debts are fixed in nominal terms leads to defaults as wages and prices fall but debt payments remain constant.
causalpending
Speaker
George GammonEvidence Quote
“if Bank lending goes down then the money supply is also going to go down... they have to cut Moody's wages from 250 down to 100,000... Moody's loan payment... is let's just assume around $2,000 a month... their purchasing power relative to their debt payment has absolutely changed and therefore Moody defaults”
Created: 8/11/2026, 1:10:24 AM
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