What An American Bank Run Would Look Like

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Mon, 07/11/2011 - 00:47 | 1442674 baby_BLYTHE
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Can't wait.

a WHOLE NEW DEBATE will soon emerge, never mind this fake 'debt ceiling debacle'

when the event of which is described above, got PMs (for realz)?

Sad most fail to recognize the economic reality of history once again repeating itself.

Mon, 07/11/2011 - 01:15 | 1442734 WhiskeyTangoFoxtrot
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I think I'm in love. Lol. Prep and wait for the soon-to-come fall. It's basically inevitable at this point

Mon, 07/11/2011 - 02:55 | 1442837 Vic Vinegar
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I love your ID and avatar dude.  But keep in mind...and why not dance to this song tonight:

http://www.youtube.com/watch?v=WJiHp-2CmVY

Mon, 07/11/2011 - 03:55 | 1442852 Guy Fawkes Mulder
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Glad to see ZH talking about Bank Runs.

They really do mean martial law at this point.

Like we were looking at in 2008 -- like always happens in every credit money system -- boom, bust, bank run.

Get out of the Ponzi and stay out.

And don't get out of the Ponzi, because everyone else in the scheme needs you to keep dancing.

http://www.zerohedge.com/article/chart-day-currency-devaluation-old-school-style#comment-1265536

(for all you mouth-breathers out there: this link means you click to go there and then be sure to see comment 1265536 -- or ctrl+F "5536" -- it's a very relevant anecdote)

Mon, 07/11/2011 - 04:51 | 1442889 Weisbrot
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Looks like government corruption & inefficiencies will screw us every time

 

 

 

 

Mon, 07/11/2011 - 08:03 | 1443070 66Sexy
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Trade fiat digital currency, which can be taken away from you at any time, for a REAL precious metal: Platinum.

Or, silver if you like.

Like trading places: "Your debit card, please".

They can just 'turn off your chip'. SHut you down with one call from Joseph Lieberman.

Wake up, check your accoutns: $0.

"Sorry schmuck, we TOOK your money. whatcha gonna do about it? Sue us? HaHaHa"

Scary.

Mon, 07/11/2011 - 09:33 | 1443362 fallout11
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You sure don't want to be in "physical" (lol) dollars, either. Look at every single currency revaluation of the 20th century, the old physical currency was either declared null and void after a short period of allowable trade in (at devalued levels, often as much as 10 old :1 new) or just declared null and void (or became that way via market forces).

Mon, 07/11/2011 - 10:40 | 1443640 knowless
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the only reason to hold dollars is for the short window where you can't get money out of the banks, but people still take dollars. think like, people are deer in headlights, well, you have a bunch of dollars (which are about to be worthless) you can topoff your reserves of food or gas or whatever from whoever is stupid enough to trade things to you for dollars even though the banks have halted electronic transactions.

Mon, 07/11/2011 - 16:29 | 1445272 XitSam
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+1

Mon, 07/11/2011 - 10:59 | 1443758 mickeyman
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Save in nickels.

Mon, 07/11/2011 - 08:18 | 1443102 duo
duo's picture

I'll repeat:  When  the SHTF, cover your stash with shit and drive to Belgium

Mon, 07/11/2011 - 05:49 | 1442921 Yen Cross
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 Hey Vic . +1 W/T/F has been out of the (tumble weed) far too long.

 

   This isn't a dating site. And Blyth is but a junior contributer...

Mon, 07/11/2011 - 10:13 | 1443472 Nacho.Libre
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A couple of months ago I was at a luncheon where Fed Pres Fisher from the Dallas Fed gave a talk.  The numbers he threw out for physical cash that I was remembering was 906B, but billion here a billion there, you know.  Anyway, he called this "walking around money", money you have in your pocket.

What was very intersting that he said, that would be very relevant to this article, was that about 60% of all physical walking around money was outside the US.  Looking a the bank run scenario again with only 40% of the available cash now takes on different light.  And if you all remember, the recently printed up $100B of new $100 dollar bills were screwed up and they have to go physically sort through them which, even if they had a high speed sorter, would take over a year!

 

Mon, 07/11/2011 - 00:41 | 1442675 phungus_mungus
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What a bank run in the US would look like?

 

http://www.youtube.com/watch?v=rcPrt57EXRk

Mon, 07/11/2011 - 02:38 | 1442824 Tense INDIAN
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Bend OVER ...ROLL OVER...and take it in the ASS....

Mon, 07/11/2011 - 05:04 | 1442891 Sudden Debt
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Pfft....the FED would just start printing 1000,10.000 and 100.000 bills. Maybe even 1000.000$ bills.

It would only take a week to supply the market with those "Hard" paper dollars.

GHUTENBERG HAS GOT THAT ONE COVERED MY FRIENDS!

 

The real problem starts AFTER a bank run. When there are so many paper dollars in ciruclation that everybody starts asking himself: is this paper or money?

And then real hyperinflation kicks in.

 

 

 

Mon, 07/11/2011 - 06:04 | 1442935 brodix
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Reagan on the thousand. Bush 1 on the ten thou. Clinton on the hundred thou. Bush 2 on the million. And at the rate it's going, Obama on the billion.

Mon, 07/11/2011 - 07:14 | 1442985 Sudden Debt
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I think they'd better use Disney characters which are international more know and respected than those presidents.

But if you want to stick to those characters, they can first make a cartoon of them.

Cirgar Clinton, Bomb Away Bush, Looney Bush Junior, Obama Dumbo and Dementia Reagan the Second generation... something in the line of X-men.

Mon, 07/11/2011 - 06:32 | 1442957 Yen Cross
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 +1 YEN

Mon, 07/11/2011 - 08:14 | 1443093 css1971
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Ding, we have a winner.

 

Y'know, I bet they already have the notes printed.

 

Mon, 07/11/2011 - 08:32 | 1443132 WmMcK
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I (not John Marshall) will return on the $500.

It'll rhyme with '29, bitchez. (with security added)

$500: William McKinley
$1,000: Grover Cleveland
$5,000: James Madison
$10,000: Salmon P. Chase
$100,000: Woodrow Wilson

http://cgi.ebay.com/1934-500-MCKINLEY-FEDERAL-RESERVE-NOTE-LARGE-COPY-/2...

 

Mon, 07/11/2011 - 08:52 | 1443206 White.Star.Line
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Someone had some good coffee this morning, with an unusually valid point to make in the early AM.

Yes, since when would a lack of paper and 0s keep a printer of usury notes from meeting demand?

Not that it really makes a difference.
Hyperinflation from too much money, or collapse from having none.

End result the same....

Mon, 07/11/2011 - 00:46 | 1442680 Bansters-in-my-...
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" as of July 6 there was $1.66 trillion in bank reserves with the Fed, 

Nice try....next joke.

Mon, 07/11/2011 - 00:50 | 1442688 zorba THE GREEK
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 A bank run is not going to happen because the treasury will just announce that all deposits

 in banks, money markets, and CD's will be backed by the full faith of the United States Treasury.

 That's the only thing that backs up paper currency as it is. So where's the problem? Now if 

 everyone wanted their money redeemed in Gold, now you got a problem. 

Mon, 07/11/2011 - 00:52 | 1442693 Tyler Durden
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The entire point of this post is that the thought experiment of the bank run would occur when said full faith is exhausted.

Mon, 07/11/2011 - 01:02 | 1442704 Spitzer
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I didn't think a physical Thai baht in 1997 was worth more then a virtual one but I never looked at the data.

Too much emphasis on quantity in this post. Quantity has little to do with it.

Mon, 07/11/2011 - 01:12 | 1442725 random shots
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This post is the equivalent of...I better not drive a car because I might get into an accident and die.

Tyler,

You are getting closer and closer to fear mongoring everyday that passes.

Mon, 07/11/2011 - 01:19 | 1442748 Spitzer
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You know nothing about basic economics.

Mon, 07/11/2011 - 01:29 | 1442757 TruthInSunshine
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by random shots
on Mon, 07/11/2011 - 01:12
#1442725

This post is the equivalent of...I better not drive a car because I might get into an accident and die.

Tyler,


'Those who ignore history are destined to become roadkill at some point.'

- Author unknown

 

Do you really believe it's not possible many of us will see a bank run in the U.S. at some point in our lifetimes, especially given the trajectory that we're witnessing form?

$250,000 in FDIC insurance on deposits won't stop a stampede under an entire litany of scenarios.

While I'd never be able to hazard an accurate estimate of the odds of this happening, I will say that it's my humble opinion that it's far larger than most people suspect, whereas you at least appear to insinuate that it's almost impossible.

 

Mon, 07/11/2011 - 09:30 | 1443354 1100-TACTICAL-12
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Why any one would keep other than money to pay bills in the bank, is beyond me. And will fully deserve the hosing they someday will receive..

Mon, 07/11/2011 - 10:58 | 1443744 mickeyman
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In the event of a collapse the gov't will have no choice but to accept electronic dollars to pay your taxes. Likewise your mortgage and any bank debts would have to be accepted in order to maintain appearances. You would need cash for any nonessentials such as food.

Up here in Canada, due to the linking of the banks, there will be no such thing as a bank run. If one goes, they all goes. But I've often wondered--if all the banks fail, and then the government sends you a cheque for the total amount you had on deposit--where do you go to cash it?

Mon, 07/11/2011 - 18:07 | 1445598 Meatier Shower
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"You would need cash for any nonessentials such as food."

Erm....I am sure that even in Canada, food is not nonessential, eh?

Mon, 07/11/2011 - 06:11 | 1442943 Pondmaster
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With all due respect to Tyler's work , I have to agree . I detest fear mongering . ZH should be above that .Its insulting to a persons intelligence . Use your scenarios in a movie script please , and not here . nuff said .

Mon, 07/11/2011 - 07:49 | 1443043 flacorps
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It's more like "if this theatre caught on fire, could I make it to the exit?"

Mon, 07/11/2011 - 08:35 | 1443143 Calmyourself
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The more you stumble about in the dark the closer you are to a nasty toe stubbing..

Mon, 07/11/2011 - 12:36 | 1444265 sasebo
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Clearly TD is not saying that there is going to a bank run. He's just pointing out that there is not enough paper money to cover one. What you do about it is your business. And I might ask, who determines if there is a bank run? You?

Mon, 07/11/2011 - 01:20 | 1442733 narnia
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bank holidays.  that's what would happen.  

it's hard to imagine this whole thing unfolding without at least one physical currency panic. they'll just call a series of holidays, fire up the presses & purchase worthless debt so granny can pull out her soon to be worthless dead presidents.  

btw, the $23 trillion number is pretty close to my calculation of the REAL US national debt, excluding the NPV of entitlements & international alliances liabilities (IMF, World Bank, etc.). 

Mon, 07/11/2011 - 09:11 | 1443276 UgglyBetty
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Agree 100%. They may let some banks fall, but in the event of complete lost of credibility, no one will be allowed to take out the money from the bank. We know that very well down here in Latin America. That's why you know you cannot keep your savings in banks, every 8-10 years a new liquidity problem arises and the same thing again: bank holidays, deposit confiscation, extraction limits, currency exchange prohibitions, and so on, the same tune over and over again for decades now. That's why people keep dollars in bills, not electronic, "under the matress" or in safety boxes. Money in banks is just transactional, day to day operations; real savings are not there.

Mon, 07/11/2011 - 06:24 | 1442908 cranky-old-geezer
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A bank run is not going to happen because the treasury will just announce that all deposits in banks, money markets, and CD's will be backed by the full faith of the United States Treasury.  That's the only thing that backs up paper currency as it is.

"Full faith and credit of the US Government" has to do with the government paying its debts.  

It has nothing to do with the currency, which the US Treasury has no control over.

I don't foresee a bank run in America. If demand for physical currency suddenly skyrocketed, the Fed would declare a bank holiday, you can't get your money out, end of story.

The real threat is a dollar collapse, where the rest of the world suddenly loses confidence in the US dollar.

That's exactly what the growing CRIIPE alliance is quietly working on, taking the rest of the world away from the US dollar.

When (not if) that happens, OPEC nations will suddenly stop accepting US dollars for their oil. 

Not even Iraq.  America will be kicked out of Iraq (and Afganistan) instantly under threat of China / Russia / India / Iran / Pakistan nuclear attack. 

Forget Brent crude too, Britian will join the alliance (along with the rest of Europe) and back away from America.

America won't be able to buy oil anymore, at any price. Bernokio can print all the currency he wants, it won't matter, America won't be able to buy oil for any amount of dollars, those dollars won't be accepted by OPEC. 

Domestic oil production will be nationalized, fuel will be severely rationed.  It won't matter how much gold and silver you have, you won't be able to buy fuel except perhaps on the black market, and it won't matter, the American economy will collapse into chaos quickly, you won't have a job to go to, and store shelves will be empty.

That's when the US dollar collapses and America collapses in a few days or weeks.

By the way, Israel will be hung out to dry.  Sure they have nukes.  But Israel would be turned to glass if they tried to use them, so Israel will back down and go along.

S-C-O.  That's the most frightening three letters to America's (criminal) leaders now.  They know what it means and they know America's time is almost up.  That's why they're looting America fast as they can now.  They know America doesn't have much time left.

Mon, 07/11/2011 - 06:34 | 1442951 Green Leader
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Doesn't USA (I mean, the FED) have plenty of Iraqi Dinars to buy oil with?

Wasn't that part of the plan? Invade, devalue currency, issue new bills, revalue tham years later, pay for the war and make a profit. Whether the plan works out or not that's a whole different story, but that could very well be the bankster's back door...

 

Mon, 07/11/2011 - 07:36 | 1443013 Yen Cross
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 You are kidding? Green and red?

Mon, 07/11/2011 - 08:59 | 1443096 TruthInSunshine
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by Green Leader
on Mon, 07/11/2011 - 06:34
#1442951

 

Doesn't USA (I mean, the FED) have plenty of Iraqi Dinars to buy oil with?

Wasn't that part of the plan? Invade, devalue currency, issue new bills, revalue tham years later, pay for the war and make a profit. Whether the plan works out or not that's a whole different story, but that could very well be the bankster's back door...

 

Aha!

You see clearly.

 

The U.S. has major bases in Saudi Arabia, Kuwait, U.A.E., Iraq AND QATAR, which together produce a big, big chunk of the global oil production. Iraq has the world's 3rd largest proven oil reserves (8%); that's larger than Iran, and almost as much as Canadian oil reserves (with Canada having much of that oil locked up in tar sands, which has a higher extraction cost).

China is fiddling around in Africa, "buying up dictators, land and oil," when Nigeria is the basic play there, and Africa produces 9% of the world's oil supply in totality (barely more than Iraq), while the U.S. has major military bases that control, directly or indirectly, about 40% of the global oil supply (subtracting Iran from the middle east producers), in the Middle East, alone (it can be argued Libya is already under our indirect control).

No one has outmaneuvered the U.S. in what is a dirty, dark chess game of oil real geopolitics.

Turning to our immediate neighbors who produce quite a bit, Canada and Mexico - are they really going to stiff the U.S., for a whole wide variety of good reasons to not do so (putting it mildly)?

 

Mon, 07/11/2011 - 17:14 | 1445438 Green Leader
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From what I've read, China has around 83% of new oil well leases in Iraq.

The plan is going on, whether it holds or not that's another story.

Thu, 07/14/2011 - 07:21 | 1455352 Henry Chinaski
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What is the major U.S. base in Saudi Arabia? Check your facts.

Thu, 07/14/2011 - 09:19 | 1455631 fallout11
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The US once had 8 bases in Saudia Arabia, as recently as 1996. However, as of 2003 all US forces have been moved to Qatar.

Thu, 07/14/2011 - 09:32 | 1455688 fallout11
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Duplicate post, sorry

Mon, 07/11/2011 - 11:42 | 1444051 Bob Paulson
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The US will ramp up production of its own oil, of which it has plenty.

Domestic oil nationalized? Not in our lifetime.

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