Anyone having problems taking cash out of banks?

schuele

Athletic Director
Apr 17, 2005
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If you really think the amount of cash your bank is keeping on the premises at any particular time is an indication of its solvency, financial condition or the stability of your deposits, you should pull your money out immediately and put it under the mattress.

Why on Earth would a bank that once had 500 people per day walk through the front door seeking cash, which now has 50, keep the same amount on hand?
 

Crazyhole

Junior
Jun 4, 2004
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If you really think the amount of cash your bank is keeping on the premises at any particular time is an indication of its solvency, financial condition or the stability of your deposits, you should pull your money out immediately and put it under the mattress.

Why on Earth would a bank that once had 500 people per day walk through the front door seeking cash, which now has 50, keep the same amount on hand?
Better read up on what happened that sparked the great depression. The whole point of reserve requirements was to ensure that banks are liquid enough to avoid a run on withdrawals. Those banks were solvent, but the quick mass exodus of cash forced them to sell off assets at a discount to regain their liquidity. It set off a cascade of collapsing values that took the whole world down.
 

schuele

Athletic Director
Apr 17, 2005
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Better read up on what happened that sparked the great depression. The whole point of reserve requirements was to ensure that banks are liquid enough to avoid a run on withdrawals. Those banks were solvent, but the quick mass exodus of cash forced them to sell off assets at a discount to regain their liquidity. It set off a cascade of collapsing values that took the whole world down.
So if banks bump up their cash on hand by, say 20 or 30%, that will prevent this? Of course not. I’m not saying people should be unconcerned about the financial condition of their bank. I’m saying that a bank tweaking its amount of cash on hand should not alter whether or not you think it’s a safe place for your money.
 

Crazyhole

Junior
Jun 4, 2004
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So if banks bump up their cash on hand by, say 20 or 30%, that will prevent this? Of course not. I’m not saying people should be unconcerned about the financial condition of their bank. I’m saying that a bank tweaking its amount of cash on hand should not alter whether or not you think it’s a safe place for your money.
Logically speaking, no it shouldn't make a difference. But when fear enters the equation like it did in 1929 people dont think logically. Liquidity is necessary to avoid a solvency issue as everyone that has ever lost a job knows. If you can't pay your creditors (in this case, depositors), you have to start selling assets off quickly or find someone to loan you money. Its not at all surprising that we have been teetering on the brink of a liquidity trap since April and the effects of that are demonstrated by the OP.
 

saluno22

Defensive Coordinator
Mar 1, 2006
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Logically speaking, no it shouldn't make a difference. But when fear enters the equation like it did in 1929 people dont think logically. Liquidity is necessary to avoid a solvency issue as everyone that has ever lost a job knows. If you can't pay your creditors (in this case, depositors), you have to start selling assets off quickly or find someone to loan you money. Its not at all surprising that we have been teetering on the brink of a liquidity trap since April and the effects of that are demonstrated by the OP.
It will be like toilet paper hoarding on steroids.
 

schuele

Athletic Director
Apr 17, 2005
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Logically speaking, no it shouldn't make a difference. But when fear enters the equation like it did in 1929 people dont think logically. Liquidity is necessary to avoid a solvency issue as everyone that has ever lost a job knows. If you can't pay your creditors (in this case, depositors), you have to start selling assets off quickly or find someone to loan you money. Its not at all surprising that we have been teetering on the brink of a liquidity trap since April and the effects of that are demonstrated by the OP.
Yeah I should add that there are definitely banks where I would not put my money - it just doesn't have anything to do with the amount cash they happen to keep on hand. As the for bank that I use, I would not expect to walk through the door without an appointment, carrying a laundry bag and a shoe box, take my place in line behind Fred and Ethel Mertz and withdraw everything I have deposited there.
 

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