What Happens If Everybody Pulls Their Money Out Of The Bank Today? - Mike Maloney

For every dollar that you have in the bank there is actually 0.00061 dollars available...in other words, there's 6 cents for every $100 dollars of deposits that you have at the bank. Got Gold? Got silver?






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and that means that for every dollar that you have in the bank
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there is actually 0.000011% thats other words there's six cents for every $100
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of deposits that you have at the bank they can actually pay out six cents
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worth of cash on $100
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hi this is Mike Maloney and this is a follow-up to a video I made a couple of
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weeks ago when I end up with was showing how much currency is available if
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everybody was to go to the bank today and withdraw all of their funds the
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thing is that banking is very very convoluted and so I wanted to dig a
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little bit deeper into that for everybody and show you just how
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convoluted this gets this is based money and I have talked about or base currency
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is the proper term they call it the monetary base but its base currency it's
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not money but this goes all the way back to 1918 so this is when the Federal
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Reserve started publishing or started collecting all their data and I can zoom
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in on this never left it the long view of it because I like to see the
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recession bars and how regular that recessions are and point out that we're
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due for a recession but this base money is the currency that's in circulation
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out in the public
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plus the reserves that banks carry they either carry those reserves as want cash
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or they carry it as deposits at the federal reserve so the commercial banks
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all have accounts at the Federal Reserve and so I want to take a look at the
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reserves so of base currency when you deduct this is 3.9 trillion and you
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deduct the currency that's in circulation basically two point six
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trillion is held as reserves the total reserves at depository institutions is
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2.5 to basically trillion that's at banks there's some reserves held
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elsewhere I don't know where but the difference between this figure and this
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figure is that this figure is a measurement of just what's in the banks
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or in the bank's accounts at the Federal Reserve
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now one thing that's it that's really interesting if you look at the total
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reserves of depository institutions that I just threw their this in here because
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I stumbled across this these are reserves that are non borrowed so
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they're not owed back to they were they weren't whipped up a note back and the
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only difference here is you see that it goes negative during that crisis of 2008
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so all of this was borrowed the banks have to have a certain percentage of
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these reserves are reserves that are against loans they used those in
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fractional reserve banking they have to have a certain amount of dollars in the
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vaults or on deposit with the Fed in order to create loans off of those
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dollars that they have in reserve so the banks were basically bankrupt during the
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crisis of 2008 and this shows it that they didn't have the reserves the
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deposits to be able to pay this out and they had to borrow that from the Fed all
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of this stuff that we're the banks went negative their banks were upside down
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during the crisis of 2008 but to get back to this these are their required
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reserve balances and of that 2.52 trillion only ninety billion is
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currently ninety two point seven billion is currently required for the banks to
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have that backing up the loans that they have created on top of this these the
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required reserves that they have to have
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have and then so if you deduct the required reserves from the reserves you
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end up with excess reserves of depository institution so these are the
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excess reserves that the banks have that they can actually pay out and this is is
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2.3 6 2.37 trillion and I took this you know divided it by instead of using
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to did last time m2 is the current broadest measure of the currency supply
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but they used to publish before March of 2006 they published m3 and that was the
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broadest measure of the currency supply and there's a couple of people that
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calculate and three one of them is John Williams of shadow government statistics
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i subscribe to his wit his services and right now he says that m3 stands at 17
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trillion two hundred and forty billion so damn to that I was when I did these
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calculations and the video a couple of weeks ago I was using m2 m2 is at 12
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points something trillion I don't remember exactly what it was two weeks
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ago but it was at 12 something trillion so this is taking the entire currency
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supply the broadest measure is everybody went to all of the banks and brokerage
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houses and asked for their currency and they wanted it in hundred dollar bills
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how much could you get well if you take the excess reserves and if you take that
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and divided by m3 there's actually about 13 cents it's closer to 14 13.7 cents
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for every dollar that we have deposited that we could get back but you couldn't
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get this back like tomorrow you couldn't go in there tomorrow or today and ask
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for your currency and get that back because most of this is just digits that
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are floating around in the computers of the Federal Reserve
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these are most of this excess reserves is held in the commercial banks accounts
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at the federal reserve so what I showed last time was vote cash in when I showed
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it a couple of weeks ago it was 73 billion now in sixty 9.8 billion dollars
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and that's because of this seasonality thing it peaks in January and then
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starts to fall in these numbers are as of March we don't have the april numbers
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yet because a this is a monthly chart in April isn't data is in the last time
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that I compiled this it was as January in the last video so we're at sixty 9.8
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except some of these this some of the dollars that are in the vaults are also
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pledged against loans they were used to create fictitious dollars that didn't
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exist when somebody signs their name to a mortgage or an auto loan or credit
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card or any time that a bank is going to create currency through fare fractional
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reserve lending some of the time they have to have dollars in the bank to back
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up this loan that they are creating I say some of the time the reserve ratios
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believe are 10 percent for the first three million that a bank loans and then
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it drops to 3 percent for the next 73 million or something like that and then
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after that there's no reserve they just get to create unlimited dollars and you
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can find out the actual figures it's on the Fed's website here you just have to
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poke around a bit but because some of this is pledged against loans it means
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that in the end that is brought cash used to satisfy required reserves so the
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69.8% three is pledged against loans that have been
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made so it's used to satisfy these required reserves so if they wanted to
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pay out any of these dollars what that means is that the bank that's paying it
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out
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would have to sell off the loans that are related to this cash used to satisfy
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required reserves to another bank or they would have to call in the loan
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which contracts the currency supply this deflationary that is what was happening
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during the great depression banks were paying out cash and they had to do so
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they had to contract their phones their loan book so what's left over
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shares vault cash surplus these are the dollars in the vaults of the banks that
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they can pay out two day against people coming in closing their accounts or
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asking for some of their actual cash in $100 bills and such and so there's
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actually only ten billion five hundred million that the banks can pay out
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against 17.24 trillion m3 and that means that if you don't want to wait for the
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Federal Reserve I mean you can wait for these excess reserves right here they've
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got these reserves in deposits at the Federal Reserve Banks and the banks can
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withdraw this and pay that out in $100 bills but how long is it gonna take the
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Bureau of Engraving to print 2.3 67 trillion dollars worth of $100 bills its
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thats I don't know if that measures in months or years of running the printing
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press but what they actually have to pay out today or tomorrow is just the 10.5
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15 billion and that means that for every dollar that you have in the bank
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there is actually
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dollars so that's other words there's six cents for every $100 of deposits
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that you have at the bank they can actually pay out six cents worth of cash
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on $100 and so has my friend Dennis Miller says the Federal Reserve Bank the
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only reserve they've got is they reserve the right to print because that's what
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they're going to have to do if you actually want some of your cash but what
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they would do before that is they would probably try to make cash illegal so
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that's it for this video if you felt that you got something out of this the
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education and so on please like this video and share it with anybody that you
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can thank you very much we'll see you next time



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