What will happen if people withdraw their cash from the banks?

dollar_ras2

Here’s another one. Will also be used in the film.  Showing what will happen to the banks if people withdraw their cash. The green dollar sign represent cash and the gray represent credit created from out of cash by the banks.

Here’s a smaller version if you want to download and use it.

dollar_ras32

And an even smaller:

dollar_ras4

And a tiny one

dollar_ras6

They almost form a new triangle together.

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4 Responses to What will happen if people withdraw their cash from the banks?

  1. Do you think that would happen? People pulling out their cash. It really wouldn’t make a difference I would think.

    • moneycreation says:

      Well, cash is part of the banks reserves from which credit is expanded. And since cash only represent a fraction of what the bank are obligated to pay out (since the depositors “money” only is “promise to pay” bank money). A Latvian stand up comedian was put into prison recently when he encourage the audience to go out and whithdraw their cash from the ATMs – that shows how sensitive the system is – very few people can cause a bank run and make the banks run dry.

  2. jasonpariah says:

    Its the credit records that need to be got at.Cash is just a representation of a countrys tax payers ability to pay thier countrys debt.Cash is an illusion.If a countrys banking system did indeed fall,that countrys “cash” would be worthless or next to worthless.

    • moneycreation says:

      All money are illusions in the sense that they only are mental and social agreements on what we are going to accept as money. For the rest, please read my previous answer.

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