Banks being unable to pay off their clients would result in a great depression-like economic crash (think about the movie, it's a wonderful life at the end). Not to say that this wouldn't be horrible as it would rebalance the ratio of wealth by basically taking all the money from rich people and destroying it. It would also raise the value of the dollar by increasing its scarcity. It would bankrupt companies as they would not be able to borrow money in order to stay afloat. Basically it would screw over everybody except for people that don't use banks
It would screw over people who don't use banks as well.
Yeah grocery stores run on pencil-thin margins, and many of them rely on lines of credit to get through their day-to-day.
Banks in this scenario would suddenly be unable to fulfill credit lines and now a grocery store is left unable to purchase goods to fill their store.
It hurts anyone who eats fucking food which is all of us.
Lines of credit are usually private net 30/60 agreements with suppliers, not through a bank.
If a grocery store is operating under debt, it needs only raise prices to cover the difference. Not paying interest to banks would become a cost savings.
The people who the bank would payout, with the 20% fractional that they hold in reserve?
Yea, that'd be the rich people. The rich might lose some money, but the rich are never going to go hungry, not even in this scenario, that's just not how life works.
Reserve requirements have been 0% for a while now. Banks don't actually have any money.
Banks being unable to pay off their clients would result in a great depression-like economic crash (think about the movie, it's a wonderful life at the end). Not to say that this wouldn't be horrible as it would rebalance the ratio of wealth by basically taking all the money from rich people and destroying it. It would also raise the value of the dollar by increasing its scarcity. It would bankrupt companies as they would not be able to borrow money in order to stay afloat. Basically it would screw over everybody except for people that don't use banks
It would screw over people who don't use banks as well.
Yeah grocery stores run on pencil-thin margins, and many of them rely on lines of credit to get through their day-to-day.
Banks in this scenario would suddenly be unable to fulfill credit lines and now a grocery store is left unable to purchase goods to fill their store.
It hurts anyone who eats fucking food which is all of us.
Lines of credit are usually private net 30/60 agreements with suppliers, not through a bank.
If a grocery store is operating under debt, it needs only raise prices to cover the difference. Not paying interest to banks would become a cost savings.
The people who the bank would payout, with the 20% fractional that they hold in reserve?
Yea, that'd be the rich people. The rich might lose some money, but the rich are never going to go hungry, not even in this scenario, that's just not how life works.
Reserve requirements have been 0% for a while now. Banks don't actually have any money.