Does My Money Actually Exist?

marsey

marsey

Striker
What I mean by that is, if everyone in the country went to the bank and tried to withdraw all of their cash, would there actually be enough physical money to do this?

Or is my cash just a number in a virtual world?
 


marsey said:
Love that film.

Only saw it for the first time a few years ago and I'm ancient!
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It’s a belter and explains so many of life’s great lessons, as well as how banks work.
marsey said:
Love that film.

Only saw it for the first time a few years ago and I'm ancient!
Click to expand...
If you have the time on Christmas Eve, start watching it just after 10pm and when the clock strikes midnight In the film, it’s midnight in real life. Check these timings though.
 
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'Real' money couldn't come close to covering what everyone has in the bank.

Most money is tied to the value of national debt, bonds, shares etc. If everyone wanted all of their money in cold hard cash the world would implode.

Good explanation of how it all works here
 
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Youst to be about the gold reserves. Paper money was just a piece of paper with an iou message. These days money is in electronic format and its all got out of hand. The whole economic system is broken and we are heading for another crash one way or another and its a vicious circle. Also if you fold a 20 dollar bill (iirc) you will see the twin towers being destroyed.
 
Banks haven't had reserves to cover all their clients pretty much since the dawn of banking, it's why a run on the bank can be so damaging. Not sure how it would work with fiat currency that's not tied to anything, especially if we move to a wholly cashless society.
 
Very good Friday question and came to mind when people were moaning the gov didn't bail out Thomas Cook. When Northern Rock went under (
) many people queuing up had deposits less than £2000 (and 100% of the 1st £2000 was insured, 90% of the next £33,000 was insured - now we are 100% insured up to £85,000). See the queues when they were guaranteed their money - imagine the mayhem if people really faced loss! If it was possible to lose money then people would resort to keeping money in the house, there would be less money for loans/mortgages etc. and the economy would collapse. Banks just need to keep enough cash on hand to manage periodic withdrawls, keeping more at Christmas/Bank Hols etc.
 
marsey said:
What I mean by that is, if everyone in the country went to the bank and tried to withdraw all of their cash, would there actually be enough physical money to do this?

Or is my cash just a number in a virtual world?
Click to expand...

If you look at your notes, they're not actually money. They're a promise to pay the bearer the sum of e.g. £10.
That doesn't mean however you can go to the bank of England and demand £10 worth of gold or whatever.

If you want a really good book about how daft currency is, I strongly recommend you read Making Money by Terry Pratchett.
It's part of the Discworld series, but it's really funny.

I now call on @Some Random Guy to back me up on this.
 
Hulkenburger said:
Banks haven't had reserves to cover all their clients pretty much since the dawn of banking, it's why a run on the bank can be so damaging. Not sure how it would work with fiat currency that's not tied to anything, especially if we move to a wholly cashless society.
Click to expand...
This. It's just how banks work. Loaning to each other to invent money.

The pound has been a fiat currency since before WWII hasn't it?
 
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