Did anyone else see the segment Friday on CNBC with the Gartner group and the fed?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
With the fed asking and recieving funding for the treasury dept to print an additional 50billion in cash to keep the banking system out of a pinch should Joe Public decide to withdraw his moola from the bank? I work swing shift and thought some one would have commented about this but as of yet, nada. The guy from gartner said this was based on the assumption that each family wanted 500.00? Any takers on this?
-- nine (email@example.com), November 22, 1998
Nine - From the NYTimes is trash thread
Thanks Gayla - here's the scoop:-)or :-( depending on how badly the Bankers have screwed things up... Customer deposits in bank checking and saving accounts total $3.7 trillion. The Federal Reserve Bank estimates that there is about $488 billion in U.S. dollars circulating around the world and just one- third of that total -- about $118 billion -- is in this country. Individual banks hold about $43 billion in reserve. The Federal Reserve just a few months ago announced plans to print up to an additional $50 billion in currency to add to its normal reserve of $150 billion to $200 billion to help meet the anticipated rush for cash before 2000.
Add it all up and, depending on how you do the math, there is probably just enough cash for an average of $2,500 to $3,000 per U.S. household. . . .
-- Andy (firstname.lastname@example.org), November 22, 1998.
Andy, Well, er, no... $2500 per household would be great if it could actually be dispensed, with no ill side-effects, should the need arises. The fact is, our fractional reserve banking system has approximately $43 billion on deposit to support deposit liabilities of $3.7 trillion. It doesn't matter how much paper money is printed -- the banks can dispense only what they have on deposit and then they fail or are bailed out, first by the FDIC, and then, ultimately, by the taxpayers.
If every cent the banks had as reserves were handed back to depositors, the average household would receive $432 -- and the banks would all fail and require bailout to boot. I wish the math were more forgiving, but this is the monetary system the world has devised and which few question.
$43.2 billion / 100 million households = $432/household
-- Nathan (email@example.com), November 22, 1998.