Cashfull society

Woodsie1

I had a wonder to myself if all the people in the world wanted to withdraw all their money from the bank,would there be enough cash to do it?

I reckon no.

Tamara tamara

Woodsie1 wrote: »

I had a wonder to myself if all the people in the world wanted to withdraw all their money from the bank,would there be enough cash to do it?

I reckon no.

Ok.

And what did you wonder about next?

To be continued.

greencap

no.

due to fractional reserve banking.

biko

We should return to the gold standard

https://www.youtube.com/watch?v=LS37SNYjg8w

Woodsie1

greencap wrote: »

no.

due to fractional reserve banking.

Whats that?

Woodsie1

Tamara tamara wrote: »

Ok.

And what did you wonder about next?

To be continued.

AH is for stupid sh1t,whats the problem.

Noveight

It’s all about that mattress money, baby.

greencap

Woodsie1 wrote: »

Whats that?

if you could get interest for lending out money, and your mates asked you to hold on to some money for them for a bit, what would you do.

well thats what it is.

you tell people you'll hold the money for them, but then you lend it out, get the interest for lending it out, and in the meantime you hope that they won't all come back looking for their money all at one time.

if it goes to plan then you're just like 'ah yeah here you go' and you keep the interest.
if it doesn't go to plan you just nationalize the debts, put the country into austerity, then snort some coke, ride some brazzers, and wait til they all forget.

Woodsie1

greencap wrote: »

if you could get interest for lending out money, and your mates asked you to hold on to some money for them for a bit, what would you do.

well thats what it is.

you tell people you'll hold the money for them, but then you lend it out, get the interest for lending it out, and in the meantime you hope that they won't all come back looking for their money all at one time.

So basically not a hope in hell theres enough cash to go round.
Cheers.

Cee-Jay-Cee

Woodsie1 wrote: »

I had a wonder to myself if all the people in the world wanted to withdraw all their money from the bank,would there be enough cash to do it?

I reckon no.

It’ll never happen as I can’t remember my PIN so I’m out of the challenge and therefore it’s doomed to fail.

dotsman

greencap wrote: »

no.

due to fractional reserve banking.

Its not because of fractional reserve banking. Its simply down to the very simple idea that the vast majority of money deposited in banks is subsequently lent out. Which is the whole concept of banking. Fractional reserve banking is simply a more "extreme" version.

B.A._Baracus

Woodsie1 wrote: »

I had a wonder to myself if all the people in the world wanted to withdraw all their money from the bank,would there be enough cash to do it?

I reckon no.

There's this clip on YouTube from some rte2 show back in the day (or should I say network 2, jaysus haven't said that in a while)

But anyways it's like early 2000s (or there abouts) and it talks about recession and the likes. Uses a nice visual aid of a bath full of water and a bucket. IE, how much money people could people take out. Long story short there would be a point when banks would have to stop giving people money.

It ends with the line a recession couldn't happene in Ireland could it? (Again to that effect)


TL;DR - yes. There wouldn't be enough paper money to go around.

Tamara tamara

Woodsie1 wrote: »

AH is for stupid sh1t,whats the problem.

Absolutely no problem.
You exceeded yourself in fact.

Badly Drunk Boy

This documentary will explain:

https://www.youtube.com/watch?v=ef99bFBTR54

Moomoomacshoe

Woodsie1 wrote: »

I had a wonder to myself if all the people in the world wanted to withdraw all their money from the bank,would there be enough cash to do it?

I reckon no.

It would be a cashtastrophe

TiGeR KiNgS

Woodsie1 wrote: »

Whats that?

If you dont know what that is or can't be bothering to google, you shouldn't worry about your opening post.

Woodsie1

Tamara tamara wrote: »

Absolutely no problem.
You exceeded yourself in fact.

Yeh,you defo got some kinda problem.
Harmless musings and youve only got bad vibes.

The Satanist

dotsman wrote: »

Its not because of fractional reserve banking. Its simply down to the very simple idea that the vast majority of money deposited in banks is subsequently lent out. Which is the whole concept of banking. Fractional reserve banking is simply a more "extreme" version.

The drug trade is basically the same model, only those involved are more honest and wholesome.

Woodsie1

TiGeR KiNgS wrote: »

If you dont know what that is or can't be bothering to google, you shouldn't worry about your opening post.

I wasnt worried I just wondered.

Jeez why so bothered about an innocent AH thread.

Tamara tamara

Woodsie1 wrote: »

Yeh,you defo got some kinda problem.
Harmless musings and youve only got bad vibes.

No problem at all.
Nothing wrong with my vibes.
It's a light hearted forum and it comes with a bit of ribbing in the replies. That's all it was. A bit of light hearted joking. I apologise if it offended you.

Woodsie1

Tamara tamara wrote: »

No problem at all.
Nothing wrong with my vibes.
It's a light hearted forum and it comes with a bit of ribbing in the replies. That's all it was. A bit of light hearted joking. I apologise if it offended you.

Nah its all good,I dont get offended easily.
Im not upset with getting bad vibes off anonymous posters on the internet.
Just thought it strange,your attitude to something innocuous.

Tamara tamara

Woodsie1 wrote: »

Nah its all good,I dont get offended easily.
Im not upset with getting bad vibes off anonymous posters on the internet.
Just thought it strange,your attitude to something innocuous.

Yeah when you post in after hours you leave yourself open to that.
Maybe in future I'll add (only kidding) to my posts.

Woodsie1

Tamara tamara wrote: »

Yeah when you post in after hours you leave yourself open to that.
Maybe in future I'll add (only kidding) to my posts.

No need,Ive enough going on in my life not to get upset over my silly posts online(or the replies they get).

Tony EH

Moomoomacshoe wrote: »

It would be a cashtastrophe

I'll get your coat.

Tamara tamara

Woodsie1 wrote: »

No need,Ive enough going on in my life not to get upset over my silly posts online(or the replies they get).

Ok me too.

Edgware

Tamara tamara wrote: »

No problem at all.
Nothing wrong with my vibes.
It's a light hearted forum and it comes with a bit of ribbing in the replies. That's all it was. A bit of light hearted joking. I apologise if it offended you.

Ah gee, now you've gone and spoilt it.

BrokenArrows

Woodsie1 wrote: »

I had a wonder to myself if all the people in the world wanted to withdraw all their money from the bank,would there be enough cash to do it?

I reckon no.

Well it's an easy answer. No.
There wouldn't even be enough cash in the world for one a single major city to withdraw all to cash.

Wanderer78

Let's start a bank run, and see what happens, we can put it to bed then

Wanderer78

Wanderer78 wrote: »

Let's start a bank run, and see what happens, we can put it to bed then

Customer accounts are a liability on the bank's asset sheet.

It isn't so much that you have, say 10k in AIB. It's that AIB has a liability to you in that amount.

Banks don’t hold excess reserves; it’s just too expensive. They hold enough to be compliant, and to meet their internal liquidity models, in accordance with the LIquidity Coverage Ratio.

This, the LCR, is a post-crash obligation that measures a credit institution’s high quality assets (cash, certain corporate debt) as a proportion of total cash outflows it might face over a severe stress of 30 days. The figure is different for every bank.

Anyway, the bottom line is that nobody really "has"money in the bank. You have a claim on money from a bank, but obviously your money isn't necessarily sitting in a bank vault. The bank simply has a financial liability to you.

Wanderer78

A Tyrant Named Miltiades! wrote: »

Customer accounts are a liability on the bank's asset sheet.

It isn't so much that you have, say 10k in AIB. It's that AIB has a liability to you in that amount.

Banks don’t hold excess reserves; it’s just too expensive. They hold enough to be compliant, and to meet their internal liquidity models, in accordance with the LIquidity Coverage Ratio.

This, the LCR, is a post-crash obligation that measures a credit institution’s high quality assets (cash, certain corporate debt) as a proportion of total cash outflows it might face over a severe stress of 30 days. The figure is different for every bank.

Anyway, the bottom line is that nobody really "has"money in the bank. You have a claim on money from a bank, but obviously your money isn't necessarily sitting in a bank vault. The bank simply has a financial liability to you.

bank run it is then, should be a bit of crack

Wanderer78

Wanderer78 wrote: »

bank run it is then, should be a bit of crack

Imagine you have a customer to whom you supply goods on credit.

Imagine you got together with other firms who supply that person with goods on credit, and all decided (for the craic) to demand payment upfront and in cash.

The client firm (in this case, the bank) would probably go under water and eventually have to be wound down, and because it's a huge firm, this would be to the detriment of the wider economy.

So your client firm (bank) is gone, you've probably lost money, and because banking crises tend to become economic crises, maybe your job isn't safe either.

I think we've all learned by now that banking crises are no craic.

moonage

When someone gets a loan from a bank that money is created out of thin air. The loan magics the money into existence.

It's a bit mad really. And you have to pay it back with interest and if you don't the bank can repossess the house/car/business etc. What a con!

grindle

Green line = what they say is there (pinky promise, swearsies!)

Red line = what is actually there.

Decent overview here.

dotsman

moonage wrote: »

When someone gets a loan from a bank that money is created out of thin air. The loan magics the money into existence.

It's a bit mad really. And you have to pay it back with interest and if you don't the bank can repossess the house/car/business etc. What a con!

No, that's not what happens at all.

ever not always

So, all our deposits are guaranteed up to 100 grand by the government. What would happen if everyone wanted to withdraw this. Would we all be issued 'promissory notes'?

ever not always

dotsman wrote: »

No, that's not what happens at all.

Where does the money come from, if the bank only needs 10 percent of what they lend out?

dotsman

ever not always wrote: »

Where does the money come from, if the bank only needs 10 percent of what they lend out?

Firstly, why do you think banks only need 10% of what they lend out?

Secondly, banks borrow funds from the ECB. If you followed the Financial news in any way, shape or form, you would hear about it on a regular basis (in relation to refi rates etc)