In America: The Final Assault In The War On Cash

[Zippyjuan]

Yes they do, their bank account doesn't drop to zero as they loan out the total value of their deposits.

The bank account balance is an IOU. When you deposit money at the bank, they issue you an IOU for the amount- that is your account balance. They can loan that money to somebody without reducing your IOU. Then that person has an IOU with the bank. Fractional reserve requirements say they cannot loan out all of that money though. They have to keep a portion in reserves in case somebody wants to collect on their IOU (withdraw their money).

If I have $20 and loan it to Bob, he now has $20 and I have zero. Bob can loan that money to Carl. Now Carl has $20. He owes $20 to Bob and Bob owes $20 to me. Consider me a depositor, Bob the bank, and Carl a borrower.

 

[Swordsmyth]

The bank account balance is an IOU. When you deposit money at the bank, they issue you an IOU for the amount- that is your account balance. They can loan that money to somebody without reducing your IOU. Then that person has an IOU with the bank. Fractional reserve requirements say they cannot loan out all of that money though. They have to keep a portion in reserves in case somebody wants to collect on their IOU (withdraw their money).

If I have $20 and loan it to Bob, he now has $20 and I have zero. Bob can loan that money to Carl. Now Carl has $20. He owes $20 to Bob and Bob owes $20 to me. Consider me a depositor, Bob the bank, and Carl a borrower.

I didn't say MY bank account, I said the bank's account, they aren't running on empty.

 

[Zippyjuan]

I didn't say MY bank account, I said the bank's account, they aren't running on empty.

You mean bank reserves then. That is the difference between what the get in deposits and what they loan out. Because of reserve requirements (and even without reserve requirements most banks would not loan out 100% of deposits because that would make it difficult to meet withdrawls and could lead to a run on the bank).

Take the chart above and subtract the red line from the blue line. That is their reserves.

 

[pmbug]

I missed this from roughly a week ago. There is a lot to unpack in it:

... BIS General Manager Agustin Carstens gave a speech at the Central Bank of Ireland 2019 Whitaker Lecture. Under the heading, ‘The future of money and payments‘, Carstens mapped out what has been a long standing vision of globalists – namely, to acquire full spectrum control of the international financial system through the gradual abolition of what Bank of England governor Mark Carney has called ‘tangible assets‘ i.e. physical money. ...

More: https://stevenguinness2.wordpress.c...s-vision-for-central-bank-digital-currencies/

 

[Stratovarious]

Bitcoin=Cashless

But warm and fuzzy, very trendy, they're eating it up like
its going out of style.....

 

[loveshiscountry]

The bank account balance is an IOU. When you deposit money at the bank, they issue you an IOU for the amount- that is your account balance. They can loan that money to somebody without reducing your IOU. Then that person has an IOU with the bank. Fractional reserve requirements say they cannot loan out all of that money though. They have to keep a portion in reserves in case somebody wants to collect on their IOU (withdraw their money).

If I have $20 and loan it to Bob, he now has $20 and I have zero. Bob can loan that money to Carl. Now Carl has $20. He owes $20 to Bob and Bob owes $20 to me. Consider me a depositor, Bob the bank, and Carl a borrower.

Aren't you referring to liquidity? If you lend Bob $20, don't you still have $20, but it's in "assets"?