by Gary North
The term "zombie banks" refers to banks that
refuse to lend to the private sector. They are run by fearful bankers who do
not trust other bankers. They do not trust many potential borrowers. According
to legend, zombies survive by eating the brains of their victims. It seems to
me that zombie bankers must be limiting their diet to brains of other bankers
and investment fund managers.
Governments are ready borrowers of money lent by
zombie banks. Zombie bankers think that their banks' money is safer with sovereign
nations' IOUs than with other forms of IOUs. The governments siphon off the
money that could have been lent to the private sector.