Forum Post: Just heard how Occupy will break the banks.
Posted 13 years ago on Oct. 16, 2011, 2:27 a.m. EST by 14Tdebt
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Oh no. I just heard this being said. "If everybody did this, it would BREAK THE CORRUPT BANKING SYSTEM: If everybody went and pulled their money out of their bank accounts, and took it home in cash, it would break the banks. The way our banking system works is that banks loan out 30 to 50 times more money than they really have, since we have a "fractional reserve" banking system. So for each $1,000 you pull out, the banks have a $50,000 problem. If people did this en masse, it would wreak havoc and show the banking system as totally flawed and corrupt. The system would have to change and politicians would have to address it. And it is totally peaceful, yet devastating." I hope the Occupy crowd doesn't do this!
http://en.m.wikipedia.org/wiki/Timeline_of_the_United_States_housing_bubble
Occupy call your neighbors, friends, families, and anyone you know who uses the big banks. Tell them to take their deposits out and put them in a local credit union or small bank Oct. 29th 2011.
That's the start date of the G8 meeting. The G20 meets Oct 23. We can try for that date if we act fast enough!!! (finance ministers and central bankers of the world’s twenty richest nations, called the G20 [eight richest called the G8])
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This begs the question: why do we allow banks to have so much leverage?
If you deposit $1, you get 0.25% interest per year on it. As a result of your dollar, the banks get to loan out not only $1, but about $50 dollars. At today's 5% home loan rate that is a pretty good return. 50 * 5% = 250% per year. Maybe that is why they own DC.
I'm aware of what leverage is, and how wealth multiplication through leverage gives the financial industry incredible amounts of power.
What I'm said was: why do we allow them so much leverage? If it makes banks so fragile that a small number of people can put them under (and consequently, jeopardize the economy at large) is this something we should allow to continue? Some amount of leverage is necessary for a bank to function as a lender but why allow them so much leverage than they place everyone else at risk for their own bad decisions.
Private profit, public risk; that isn't capitalism.
OK. Simply because they want to make more profit. Leverage = risk, as you say. But, if they fail, you pay for that too. Privatize wealth, socialize debt.
I know why banks do it.
I will repeat my question a 3rd time: Why do we allow banks to have so much leverage?
This is something that can be regulated.
It because wall st owns washington. It up to us to stop this. We have to go to our congressmen and women to demand that they enact legislation which make the banks sound. Wall St has been doing this for the past 30 years and look where they've gotten....
seriously what the f@ck is anyone leading this movement or even educating themselves. This is the most scattered unorganized ish ever wtf I came here to support but this is counter productive.
nobody is saying to do a bank run. the disorganization will actually slow us down and give banks a chance to respond.
I agree this is very discouraging
Bank walk. Bank crawl. No point in running out of this mess we built up for so long.
The core issue that we need to promote lending, and the major banks are not doing that. If people are moving their money to Credit Unions, I don't see the problem. Major banks will simply become not-for-profit, which I think is a good idea.
EDIT: You also have to admit that the leverage system only works if the economy keeps getting bigger and bigger - but the earth has only so much resources. I'd say that the age of leveraging is over . . . unless we colonize Mars, I guess.
Geez. Somehow this reminds me of the movie Its a wonderful LIfe. Well, I am transferring ALL my money from my 5 BofA and WellsFARGO accounts to my credit union. Good riddance
Sounds like a little bit of good old fear mongering propagana
We will not break anything, we are here to repair the damage that has been done.
http://www.youtube.com/watch?v=KJXx-d1KkWA
Destroying the economy would be a good thing. It would offer a clean slate from which to start again.
If you worked hard for your money and you put it in any bank, you should be able to go to that bank and take it out anytime you want to (during business hours of course). And some banks should fail, such as the "Too Big to Fail".
And no one needs to worry about anything because when Lehman Brothers crashed and burned, we would all be in hell right now. The world kept going and things normalized again soon after that.
You just don't understand the seriousness of this. If you want to, go read up on fractional reserve banking and runs on banks.
I breifly looked it up. what if we all put our $ into credit unions? This does not address the issue you are talking about. In that case, the whole system is rotten to the core and should be exposed and torn down. The ramifications are monstrous but so is the criminality of what you have so importantly explained. Thankyou.
Anyone who tells you about fractional this or fractional that is only someone that wants a corrupt capitalistic system that will die very soon. Yes, everyone of us should move their money to credit unions. The more people move their money out, the better. The Nov 5th movement showed the banks that the people are serious and the banks honestly felt the move. Yes, they retaliated those days posting capital gains, but then the articles started coming out the following week about how they were hurting in reality. We should all plan MORE move your money days to show the banks that they are nothing without the people.
And yes, DO NOT listen to those zombie trolls trying to convince you against moving your money. Remember, they have bank employees desperately trying to keep as many customers in banks as possible, which means, they will say anything to ruin "Move your money" events.
That will crash the economy immediately.
WHY?
The claim was that the banks would run out of money. With an effective "reserve ratio" of 50 or so, they only really have $1 for every $50 that were put in their bank by people/depositors. So, if even 2% of the people go get their money out it is a huge problem. Go wikipedia it, or look at some Youtube. Sounds scary. I hope Occupy doesn't do what was said.