Bitcoin Forum
December 10, 2016, 11:03:48 AM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2]  All
  Print  
Author Topic: Can bitcoin fill the void in a bank run?  (Read 3416 times)
Martin P. Hellwig
Jr. Member
*
Offline Offline

Activity: 33


View Profile
July 12, 2011, 07:53:17 PM
 #21

Am I missing the point or do I not understand your question?
What do you actually mean by filling the void? As I interpret it as: All fiat currencies have gone to smithereens and people lost all value in it and need to start again from scratch, perhaps by using bitcoin? Yes of course in that scenario bitcoin can fill the void, as can seashells, garden peas and whatever else you can convince other people to accept for trading.

In any other scenario, it would be the same question as; Can pesos fill the void in a bank run?
1481367828
Hero Member
*
Offline Offline

Posts: 1481367828

View Profile Personal Message (Offline)

Ignore
1481367828
Reply with quote  #2

1481367828
Report to moderator
1481367828
Hero Member
*
Offline Offline

Posts: 1481367828

View Profile Personal Message (Offline)

Ignore
1481367828
Reply with quote  #2

1481367828
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481367828
Hero Member
*
Offline Offline

Posts: 1481367828

View Profile Personal Message (Offline)

Ignore
1481367828
Reply with quote  #2

1481367828
Report to moderator
CurbsideProphet
Hero Member
*****
Offline Offline

Activity: 672


View Profile
July 12, 2011, 09:44:16 PM
 #22

Because of the FDIC the next bank run will be different. It won't be a mad dash to get dollars, we can get those for sure. It'll be a dash to get value for our dollars. There is and can be no guarantee on that. I suspect people who have no more room for cans of beans and toilet paper will try to get some of their wealth through the crisis in gold and bitcoin.

The FDIC has almost no money. The banks that fail every Friday like clockwork have depleted the insurance fund completely. Sheila Bair is operating off of a 500 billion line of credit with Treasury, which will not be nearly enough to prevent a bank run should a TBTF go down.  Increasing that line of credit literally requires an act of congress, meaning it wouldn't happen in time to do any good. Besides, Treasury is Broke too.


Bank runs are always, always deflationary, but the big financial crisis may not be a bank run. It depends on how much liquidity the FED provides. Too much and the ship alters course from Japan to Zimbabwe.


Failing banks have had their deposits purchased by other financial institutions.  They're not depleting the FDIC fund.  The only issue with the FDIC is it's reserves are only a fraction of their outstanding obligations so a widespread bank run would deplete the fund.  But the banks currently failing right now are not doing anything to those reserves.

1ProphetnvP8ju2SxxRvVvyzCtTXDgLPJV
FreeMoney
Legendary
*
Offline Offline

Activity: 1246


Strength in numbers


View Profile WWW
July 12, 2011, 11:20:20 PM
 #23

Because of the FDIC the next bank run will be different. It won't be a mad dash to get dollars, we can get those for sure. It'll be a dash to get value for our dollars. There is and can be no guarantee on that. I suspect people who have no more room for cans of beans and toilet paper will try to get some of their wealth through the crisis in gold and bitcoin.

The FDIC has almost no money. The banks that fail every Friday like clockwork have depleted the insurance fund completely. Sheila Bair is operating off of a 500 billion line of credit with Treasury, which will not be nearly enough to prevent a bank run should a TBTF go down.  Increasing that line of credit literally requires an act of congress, meaning it wouldn't happen in time to do any good. Besides, Treasury is Broke too.


Bank runs are always, always deflationary, but the big financial crisis may not be a bank run. It depends on how much liquidity the FED provides. Too much and the ship alters course from Japan to Zimbabwe.


Congress doesn't do fast trillion dollar bailouts? Since when?

Deflationary bank runs are for real money. You can say that what is coming won't be technically a bank run, I guess I would agree, but it sure as hell won't be deflationary.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
billyjoeallen
Legendary
*
Offline Offline

Activity: 966


Hide your women


View Profile WWW
July 13, 2011, 01:36:36 AM
 #24

Because of the FDIC the next bank run will be different. It won't be a mad dash to get dollars, we can get those for sure. It'll be a dash to get value for our dollars. There is and can be no guarantee on that. I suspect people who have no more room for cans of beans and toilet paper will try to get some of their wealth through the crisis in gold and bitcoin.

The FDIC has almost no money. The banks that fail every Friday like clockwork have depleted the insurance fund completely. Sheila Bair is operating off of a 500 billion line of credit with Treasury, which will not be nearly enough to prevent a bank run should a TBTF go down.  Increasing that line of credit literally requires an act of congress, meaning it wouldn't happen in time to do any good. Besides, Treasury is Broke too.


Bank runs are always, always deflationary, but the big financial crisis may not be a bank run. It depends on how much liquidity the FED provides. Too much and the ship alters course from Japan to Zimbabwe.


Failing banks have had their deposits purchased by other financial institutions.  They're not depleting the FDIC fund.  The only issue with the FDIC is it's reserves are only a fraction of their outstanding obligations so a widespread bank run would deplete the fund.  But the banks currently failing right now are not doing anything to those reserves.

The banks have more liabilities than assets, which is why they get taken closed down by the FDIC in the first place. Yes, other banks buy the deposits, AFTER the FDIC adds enough cash to make the purchase worthwhile.  You really should read the press releases that detail how much the bank failure costs the fund.

More info at calculatedrisk.com


insert coin here:
1Ctd7Na8qE7btyueEshAJF5C7ZqFWH11Wc

Open an exchange account at CampBX: options, lowest commissions, and best security
https://campbx.com/register.php?r=0Y7YxohTV0B
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
July 13, 2011, 02:29:22 AM
 #25



More info at calculatedrisk.com



one of my favorite websites altho CR has been way more bullish than i have been.
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
July 13, 2011, 02:33:57 AM
 #26

You're taking your advice from an article writen by "Tyler Durden"?

Zerohedge is the best econoblog on the Web, IMHO- certainly the most subversive. The blog owner uses a psudonym to promote free speech, the same way the authors of The Federalist Papers did.

Zerohedge is the Wikileaks of Wall Street.

+1
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
July 13, 2011, 02:37:31 AM
 #27

Because of the FDIC the next bank run will be different. It won't be a mad dash to get dollars, we can get those for sure. It'll be a dash to get value for our dollars. There is and can be no guarantee on that. I suspect people who have no more room for cans of beans and toilet paper will try to get some of their wealth through the crisis in gold and bitcoin.

The FDIC has almost no money. The banks that fail every Friday like clockwork have depleted the insurance fund completely. Sheila Bair is operating off of a 500 billion line of credit with Treasury, which will not be nearly enough to prevent a bank run should a TBTF go down.  Increasing that line of credit literally requires an act of congress, meaning it wouldn't happen in time to do any good. Besides, Treasury is Broke too.


Bank runs are always, always deflationary, but the big financial crisis may not be a bank run. It depends on how much liquidity the FED provides. Too much and the ship alters course from Japan to Zimbabwe.


Failing banks have had their deposits purchased by other financial institutions.  They're not depleting the FDIC fund.  The only issue with the FDIC is it's reserves are only a fraction of their outstanding obligations so a widespread bank run would deplete the fund.  But the banks currently failing right now are not doing anything to those reserves.

The banks have more liabilities than assets, which is why they get taken closed down by the FDIC in the first place. Yes, other banks buy the deposits, AFTER the FDIC adds enough cash to make the purchase worthwhile.  You really should read the press releases that detail how much the bank failure costs the fund.

More info at calculatedrisk.com



you're absolutely right but they also guarantee many of the bad loans that get passed on to the new bank owners.
foggyb
Legendary
*
Offline Offline

Activity: 1302


View Profile
July 13, 2011, 02:49:29 AM
 #28

AHHHHH, don't lie to these people that FRN is not backed by anything. it is backed by none other than guns.

Guns don't kill people.
CurbsideProphet
Hero Member
*****
Offline Offline

Activity: 672


View Profile
July 13, 2011, 02:49:46 AM
 #29

The banks have more liabilities than assets, which is why they get taken closed down by the FDIC in the first place. Yes, other banks buy the deposits, AFTER the FDIC adds enough cash to make the purchase worthwhile.  You really should read the press releases that detail how much the bank failure costs the fund.

More info at calculatedrisk.com

Maybe it's my work browser but your link takes me to some foreclosure website which doesn't look like what you intended to show.

Washington Mutual was the largest bank failure in history but the cost to the agency was zero.  Yes, some of the bank failures cost the Deposit Insurance Fund but in turn all other banks pay higher premiums.  If failures exceed what's available in the DIF, the FDIC has a line of credit with the Treasury it can tap into.  I believe the only time the FDIC tapped into the line was in the early 1990s.

The bank failures we are seeing right now are small, local banks for the most part.  Nothing like what we were seeing ~2008.  Don't get me wrong, I'm not saying the FDIC has the means to cover a systemic bank failure, they don't.  But the current bank failures are not really putting the FDIC in jeopardy.  If that were the case, we'd already see a run on banks.

1ProphetnvP8ju2SxxRvVvyzCtTXDgLPJV
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
July 13, 2011, 02:59:00 AM
 #30

The banks have more liabilities than assets, which is why they get taken closed down by the FDIC in the first place. Yes, other banks buy the deposits, AFTER the FDIC adds enough cash to make the purchase worthwhile.  You really should read the press releases that detail how much the bank failure costs the fund.

More info at calculatedrisk.com

Maybe it's my work browser but your link takes me to some foreclosure website which doesn't look like what you intended to show.

Washington Mutual was the largest bank failure in history but the cost to the agency was zero.  Yes, some of the bank failures cost the Deposit Insurance Fund but in turn all other banks pay higher premiums.  If failures exceed what's available in the DIF, the FDIC has a line of credit with the Treasury it can tap into.  I believe the only time the FDIC tapped into the line was in the early 1990s.

The bank failures we are seeing right now are small, local banks for the most part.  Nothing like what we were seeing ~2008.  Don't get me wrong, I'm not saying the FDIC has the means to cover a systemic bank failure, they don't.  But the current bank failures are not really putting the FDIC in jeopardy.  If that were the case, we'd already see a run on banks.

http://www.calculatedriskblog.com/

the FDIC has been able to extend and pretend much longer than any of us would have thought.  they really don't have the reserves to have guaranteed everyone's acct up to $250K and some accts have unlimited guarantees.  thats plain ridiculous and they certainly would have to tap Treasury to cover losses in a bank run.  what can't go on forever won't.
Pages: « 1 [2]  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!