Quote:
Originally Posted by nelsonob1
You do realize that the banks have our cash all the time, right? Whether it is bank deposits, loan payments, CC payments, the cash is held in a bank. If we buy gold, that cash goes into a bank. The only real danger is if a lot of depositors move the cash to another bank and create a run. Pretty hard to do that with a big bank.
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They don’t have our cash all the time. When I take out $100 for spending money that’s mine.
That said, if a mortgage payment automatically came out of your bank and you could no longer afford it. What would you do?
Most people would take the money out of the bank, or start a new account with a different bank. That way the original bank couldn’t access their funds and withdraw the mortgage leaving them with no cash.
So a mortgage crisis, would create a run on the banks and liquidity crisis as a result of people hoarding cash, changing banks and not paying bills.
Again I could be wrong