Dedicated to the prospect of setting up a full reserve bank in the USA, as well as analysis of the current economic environment.

Thursday, December 18, 2008

100% Reserve Now?

Here's an interesting article from exploring the idea of 100% reserve banking. Near the end, he reveals a rather startling statistic:
At the moment, banks are holding nearly 100% reserves for transactions deposits. (As of November 19, they had about $652 billion in reserves for about $700 billion in transactions deposits.)
Amazing. Might it be possible that all these banks hoarding cash might actually be a good thing? Related to that - might the incredibly tightened lending standards also be a good thing?

Despite all the government intervention, trying to re-open the spigots of easy, inflationary money, the banks are actually acting like banks ought to!

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