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Run on the banks

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Run on the banks

Unread postby Monk » Thu 27 Oct 2005, 16:08:52

... what do you guys think is the best way to prepare?

obviously you could convert cash to some other form of asset, like gold or land or whatever.

Any other thoughts?
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Re: Run on the banks

Unread postby NeoPeasant » Thu 27 Oct 2005, 16:21:06

$this->bbcode_second_pass_quote('Monk', '.').. what do you guys think is the best way to prepare?

obviously you could convert cash to some other form of asset, like gold or land or whatever.

Any other thoughts?


I decided having my mortgage prepaid several months in advance was a safer way to store money than let it sit in a bank account. I can get cash flow for future needs by letting my mortgage payments go for several months until they're actually due again. Of course I am working on an accelerated payoff of the mortgage so when that is accomplished I will have to think of some other strategy.

Plus I keep a decent amount of cash and "metal money" in my posession.
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Re: Run on the banks

Unread postby jaws » Thu 27 Oct 2005, 19:51:29

A run on the banks is impossible under a fiat money system. If there was a run the Federal Reserve (or any other Central Bank) can print an infinite amount of money to lend to the banks so they can provide the money to their creditors.
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Re: Run on the banks

Unread postby rogerhb » Thu 27 Oct 2005, 19:54:30

$this->bbcode_second_pass_quote('jaws', 'A') run on the banks is impossible under a fiat money system. If there was a run the Federal Reserve (or any other Central Bank) can print an infinite amount of money to lend to the banks so they can provide the money to their creditors.


Agentina was fiat when it collapsed and limited withdrawals.
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Re: Run on the banks

Unread postby CrudeAwakening » Thu 27 Oct 2005, 19:55:20

Yeah, you get your money out but it's no longer worth as much due to the associated inflation.
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Re: Run on the banks

Unread postby jaws » Thu 27 Oct 2005, 19:58:42

$this->bbcode_second_pass_quote('rogerhb', '
')Agentina was fiat when it collapsed and limited withdrawals.
No, Argentina was on the dollar standard. Which is why the country collapsed in the first place, they suffered severe deflation.
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Re: Run on the banks

Unread postby rogerhb » Thu 27 Oct 2005, 20:02:37

$this->bbcode_second_pass_quote('jaws', '')$this->bbcode_second_pass_quote('rogerhb', '
')Agentina was fiat when it collapsed and limited withdrawals.
No, Argentina was on the dollar standard. Which is why the country collapsed in the first place, they suffered severe deflation.


Ah, the dollar standard which is actually a fiat but Agentina could not press the print button.

There could still be a run on the banks where people try to withdraw paper but the banks don't have enough and it can't be printed and delivered fast enough.
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Re: Run on the banks

Unread postby jaws » Thu 27 Oct 2005, 20:07:49

$this->bbcode_second_pass_quote('rogerhb', '
')There could still be a run on the banks where people try to withdraw paper but the banks don't have enough and it can't be printed and delivered fast enough.

That's not the same as a run on the bank however, it's only comparable to an ATM running out of cash. You know the ATM is solvent, it just needs to be resupplied.

The psychology of a run is that everyone wants to cash out before the bank becomes completely insolvent. If the bank is actually solvent and just needs more paper money, there's nothing to worry about.
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Re: Run on the banks

Unread postby rogerhb » Thu 27 Oct 2005, 20:08:46

$this->bbcode_second_pass_quote('cube', '[')b]Ben Bernanke - next Federal Reserve Chairman
$this->bbcode_second_pass_quote('', 'â')€œThe U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.
I don't think the banks are going to be shutting down due to a shortage of dollars anytime soon. :wink:


So why go through all the bother of pretending to borrow it?

(rhetorical)
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Re: Run on the banks

Unread postby cube » Thu 27 Oct 2005, 20:09:18

Ben Bernanke - next Federal Reserve Chairman
$this->bbcode_second_pass_quote('', 'â')€œThe U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.
I don't think the banks are going to be shutting down due to a shortage of dollars anytime soon. :wink:
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Re: Run on the banks

Unread postby perplexd » Sat 29 Oct 2005, 14:19:07

$this->bbcode_second_pass_quote('NeoPeasant', 'I') decided having my mortgage prepaid several months in advance was a safer way to store money than let it sit in a bank account.


Plus you make 6% (or, whatever your interest rate is) return automatically. That's better than the bond market and a guaranteed return, which is way less risk than the stock market right now.
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Re: Run on the banks

Unread postby TnAndy » Sat 29 Oct 2005, 20:55:03

$this->bbcode_second_pass_quote('rogerhb', '
')
So why go through all the bother of pretending to borrow it?



They have to sort of keep up at least the appearence that the fiat system is an actual legitimate system.

But if you'll investigate further, you'll find that for the last half or so of this year, a LOT of the US debt is being purchased thru shell banks in the Carribeans........I personally think the FED is funneling that unlimited electronic source of "money" thru straw purchases of US debt since the rest of the world has about got enough to wallpaper all of their houses.

And WHO is gonna call the bluff ? Nobody with a big pile of US paper, for sure........ahahahahahaaa........what a Parker Brothers board game THIS would make.....
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