The Banking system are highly illiquid right now

[polynesia]

Of course there can be liquidity crisis in fiat system.  We just witnessed one in 2008.

No the Fed does not print money to "buy debt".  If you are talking about QE that was to inject liquidity into the system by swapping asset for reserves.

Bitcoin can't avoid liquidity crisis.  As a matter of fact it would be more prone to liquidity crisis because of its inelasticity

Low liquidity would result in bitcoin's price increasing. Wouldn't this automatically solve the liquidity issue?

[Erdogan]

What about highly insolvent?

[boumalo]

This article talks about how people are trying to protect their assets :

http://www.zerohedge.com/news/2015-02-19/meet-bureaucrat-who-had-courage-tell-truth-will-be-jobless-tomorrow

Big financial institutions in Europe can't sell more than a few millions euros worth of bonds to a bank, the market is highly illiquid. Gold and Bitcoin should thrive when the thin lawyer of confidence that the western populations have in their banking systems start to crack. It could be in a year or two years but it feels like it started so it could happen much sooner.

 Over time, banks have failed or required government assistance because they had inadequate capital, a lack of liquidity, or a combination of the two.

The Federal Reserve since the financial crisis has worked to increase the levels of both liquidity and capital at banking organizations, but long term you cant sustain this scam forever.

Banks should fail when they have been mismanaged, the market needs to eliminate the losing companies for the greater good.

[manselr]

This article talks about how people are trying to protect their assets :

http://www.zerohedge.com/news/2015-02-19/meet-bureaucrat-who-had-courage-tell-truth-will-be-jobless-tomorrow

Big financial institutions in Europe can't sell more than a few millions euros worth of bonds to a bank, the market is highly illiquid. Gold and Bitcoin should thrive when the thin lawyer of confidence that the western populations have in their banking systems start to crack. It could be in a year or two years but it feels like it started so it could happen much sooner.

 Over time, banks have failed or required government assistance because they had inadequate capital, a lack of liquidity, or a combination of the two.

The Federal Reserve since the financial crisis has worked to increase the levels of both liquidity and capital at banking organizations, but long term you cant sustain this scam forever.

Banks should fail when they have been mismanaged, the market needs to eliminate the losing companies for the greater good.

That would be if we lived in a free market, but it's not the case. Even if it was, when a bank fails families get fucked too for having their money there, its unfair.

[OROBTC]

...

One of my favorite expressions from my time over at Zero Hedge (I dropped out recently) is:

"Be your own bank, buy gold!"

That can be extended to Bitcoin as well, both are assets outside the banking system.  IMO, it is smart to have soem valuables away from the clutches of the banksters...

Perhaps if you own enough Bitcoin and gold we could say:

"Be your own Central Bank, buy gold and Bitcoin!"

[Possum577]

How does Bitcoin participate in the lending market? It seems very difficult given the one way nature of transactions and anonymity of things.