Message from @DrYuriMom
Discord ID: 528696635560165376
Indirectly, because the gov't didn't regulate banks effectively
That shows a complete misunderstanding of what money is.
Specifically the crash forced people into a saving mentality
The regulation is what lead to the problem. The Fed.
People were trying to get their money from banks that had no money to return to their depositors.
The banks had invested in things that evaporated.
Poof, no money.
where they didnt want to spend because they were unsure about their situation as a whole
People didn't save because they didn;t trust banks
Money only "disappears" due to fractional reserve banking
The FDIC exists today, and has saved us from similar issue since, because of Roosevelt response to the Depression.
FDIC is a bad policy
Didnt really save us from the housing crash
It subsidizes bad bank behavior
It monopolizes risk
It prevents regular citizens from losing everything
Instead of individuals taking bank behavior into account like they did prior.
No, it doesn't.
They didn't take bank risk into account. That's why so many people lost everything.
They couldn't when the government regulated the hell out of everything and the Fed took over.
They really shouldnt have bailed out the companies
They clearly didnt need it
I'm not defending the companies, but I am speaking up for depositors.
What didn't? Bank runs certainly happen. And before FDIC there was private insurance and banks would cover one another.
There's a difference between depositors and investors.
Yes, one is the hostage taker and the other is a hostage
But bank failures still happened and people were out their deposits
Depositors are screwed by government allowing FRB and making that standard. It is no longer on anyone's mind to understand what deposits are.
How many people know what FRB is?
How many people know that deposit accounts are investments?
I want my deposits to be zero risk. They don;t make any money anyway. They should be safe.
It's not zero risk
abbreviating the federal reserve board doesnt make it more spooky ya know
The Federal Reserve Board. Yes, I know what that it.
fractional reserve banking
not federal reserve board
The only way your deposits are going to be zero risk is if you have a bank that doesn't do loaning.
and that is how a bank makes its money.
Fractional Reserve Banking - the idea that banks don't have to just sit on deposits?