Message from @trapexit
Discord ID: 528697169323229194
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.
It happened over and over again, but not since the FDIC
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.
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?
And if there was such a bank they would likely charge higher fees
Or provide no intrest whatsoever
No, that's not what fractional reserve banking is.
That is where the government plays a legitimate role
Well, I myself would be fine with dealing with a yearly subscription for a bank if they don't do loans.
I wish loan companies and banks were seperate.
Fractional reserve banking is a banking system in which only a fraction of bank deposits are backed by actual cash on hand and are available for withdrawal.
Providing a safety net of last resort for the price of regulating banks to prevent the need for taxpayers to pay out.
At least thats what Investopedia says
That's what I learned in school, @Blackhawk342
Admittedly, 30 years ago
Yes, which means that money is pyramid on itself.
And why bank runs are 1) possible and 2) so dangerous to those who participate in the system.