I read and hear rumors and have heard things on the radio about the US being ahead of a "possible bank run". They said the banks are filling the ATMs and are gathering extra amounts of paper dollars in case people take a run at them. I've been hearing scares about this, but I know they did print a lot of banknotes in September (might be another sign?): http://www.coinnews.net/2013/10/03/us-government-prints-1-18-billion-banknotes-in-september-2013/ What else do you know about this? I've been researching, not much useful detailed info out there...
i saw a youtube clip a while back, and there are articles from many sources (http://www.businessinsider.com.au/printing-issue-renders-30-million-new-100-bills-useless-2013-8) talking about lots of 100 bills printed with errors which meant the notes couldn't be used or had to be destroyed. could be related to this. tons and tons of bills are being printed to shore up cash reserves in case of a bank run, which at the same time, they release this story about notes being printed with errors to disguise how much extra money is actually being produced.
I know that at the beginning of the year there already happened one: http://www.hangthebankers.com/us-banks-shaken-by-biggest-deposit-withdrawals-since-911/ Interest rates are now soooo low that it's not worth keeping your money at the bank and the withdrawal fees are so high that even getting your money out will cost you a lot. And I'd also add the account "maintenance" fees...
I'm glad you posted this. I don't want to be a scaremonger, but I withdrew a couple of thousand dollars today. I'll do the same tomorrow and the next day. There's a long weekend here in Sydney, China's on a one week holiday, the USA is toxic, Putin's in Bali, no one thing feels right. If I'm wrong it won't matter but this is the weekend some things may go belly up.
And the USA cant even afford to fuel up air force one to get Obama to Apec. http://www.abc.net.au/news/2013-10-04/obama-withdraws-from-apec-summit/4999006
According to the Bureau of Engraving and Printing itself http://www.moneyfactory.gov/uscurrency/annualproductionfigures.html Over 90% is replacing, so any production figure increase can just mean more replacing EXISTING dollars instead of EXTRA dollars in vaults. So claiming that they would print>stockpile dollars for bankruns is just a make-up from those that want to scare people into decisions that mean profit for them (and of course the implied loss for the scared people) A real measurement is the Federal Reserves balance for vault cash: http://research.stlouisfed.org/fred2/data/VAULT.txt Does anyone see a recent trend that suggests bank run preparations? I don't. On 2013-01-01 the figure was higher than september 2013's one. Did we see bankruns following? There IS a longer term trend, but that one just follows the total amount circulating dollars, see http://research.stlouisfed.org/fred2/data/CURRENCY.txt , so the % vaulted didn't change much. So which basis does this bankruns-pending story then have? Aside of this, there IS something new on the Bureau of Engraving and Printing's website http://www.moneyfactory.gov/uscurrency/annualproductionfigures.html Some months ago, I was able to see the production figures (and I copied them to disk), but now I see this (at least from my .be location): So for some reason, and at the moment, they refuse (at least to my .be location) to give the figures.
Those conspiracy nuts give pm people a bad name. Let's see, the new US $100 bills are due to come out October 8th? The design changes are numerous and noticeable. I plan on getting several myself. Collectors will be all over them. Could the banks possibly be stocking up on the new $100 bills? Nah, must be a sign of a catastrophic bank run ahead. Every time I see another one of these conspiracy articles, I am reminded why I don't bother to go to any of those sites any more. In their own way, a lot of those sites are worse than the main stream media.
Pirocco I went to that link and after getting that same message as you, I got this: It's like the rest of the 'shutdown' of the US Government: Spend money placing and printing laminated signs, hire walkway barriers and security guards, and now have someone manually turn off already existing websites to claim that there is no money to spend.
It's very interesting what you're saying... I read that news about the misprinted dollars a few weeks ago. It's strange that the more banknote printing has already occurred in September and now we're seeing this bank run scare. Of course, they already have the banknotes ready... which makes me wonder if those are enough. Allegedly, they printed more than double the amount printed in August. I figure: the printing of physical/paper dollars hasn't stopped, so they must be at the printing press even right now in October. I suppose, by the end of the year they will have a huge amount of paper bills printed. One word comes to my mind: inflation
According to USA Today, the US won't be able to borrow more money after October 17th, if the debt ceiling remains the same: http://www.usatoday.com/story/news/politics/2013/09/25/treasury-debt-limit-october-17/2867471/ As for banks stockpiling cash: http://www.huffingtonpost.com/2013/10/04/banks-cash-default_n_4044294.html There's also a paid article in the Financial Times saying about more cash being put away in order to prepare for a bank run.: http://www.ft.com/intl/cms/s/0/11d59fa8-2c38-11e3-acf4-00144feab7de.html#axzz2glCkmi5t And in the New York Times as well: http://dealbook.nytimes.com/2013/10...hile-preparing-for-trouble/?ref=business&_r=0 I heard on radio and have check various more or less popular websites, which spread the news. They may be copying each other, quoting each other, but there really seems to be something going on. If they spread the news, people find out and start thinking about their bank account deposits. Many will in fact withdraw as a result of this news! The media is actually contributing to the ignition of a bank run!
TreasureHunter, Difficult one for me to give you a short answer based on your question but I'll try. You or I won't cause a run on a bank by drawing our daily limit at the ATM, or even going into a branch and making larger withdrawals from the counter. It's the wholesale market that will cause a run. Lehman's was America's 4th largest investment bank. It had no (to my knowledge but stand to be corrected) retail outlets. It's when the counterparty risk departments of corporate, institutional and interbank entities get a wiff of trouble and ask for overnight funds to be returned, millions, sometimes billions at a pop. Then the proverbial starts to hit the fan. For a day or two, the affected bank starts scrambling for funds from dedicated facilities and lines of credit. They also start recalling any overnight funds they might have placed, repo out assets, talk to their central bank and start playing the averaging game with their statutory liquid assets and cash reserves . You'll be surprised how often it happens for a few days and then comes right for the bank concerned. If it doesn't and the wholesale counterparties continue withdrawing funds, it's probably good night nurse after a week. That's when we get to hear about it as the man on the street. By then, "too late she cried" for us poor buggers. I hope that helps clarify how a run on the bank unfolds in reality? Now back to what I think your question was focused on. The government printing large quantities of money (economically speaking, M1A) in the US. IMHO, I think this would be more a case of anticipated demand for hard cash by the man on the street. I'm better positioned to comment on interbank liquidity management but as a guess I would assume it's an anticipation of failure in the whole financial system and especially storage of funds electronically. Which would obviously have massive consequences if you consider what Greece did to the world's economy and its tiny in comparison to the US, economically speaking. Look, it might well cause a run on certain banks, but I think it's more a case of confidence in the financial system, or lack thereof.
The banks are stuffed to gills with the money from the Federal Reserve. They might appreciate a little bank run.
A couple days ago newsreaders said that those that so called wouldnt be paid, will be paid. Since most people are paid mid and/or end month, this entire temporary 'govt shutdown' in the beginning of the month, has not any effect on paid wages, not even temporary. So they will get paid for the days they didn't 'work' (it's abusing this word anyway), so the net remainder is that they didnt have to do the 'job'. There was no COT report released friday too. Know what? If US State had been a private company, I'd just cease to be customer and buy these services elsewhere. But they force (tax) people to pay whatever for whatever including nothing (alike this case). It's just an outstanding lack of shame. They didn't release COT report and banknotes production figures, while they will get paid without any difference, not in date and not in amount. Also, an error alike "This dataset is currently private" is quite different to unavailability. The first is a plain refusal to make data public, and this is a decision of the dataset holders, the latter is that they can't release because they don't have anything to release. And older data didn't vanish. So if they didnt 'work', then why making results of earlier 'work' unavailable? A site that shows an access rights error (data set private), isn't a site/computer that is shut down, so they could as well just show the data they produced the last decade like they did before.
And that cash stockpiling by banks is not reflecting what is stated in the articles, there two persons only talk about cash in the machines, and it's about 3 major banks out of 10. Cash in machines is only a part of bank vault cash. And they do the same in anticipation of a hurricanes consequences. So it's not like the big story / fear / scare blabla as it is suggested. Those specific banks don't fear bank runs, they only take into account the possibility that people take more cash as to be able to span a longer period to the next withdrawal. It's not like that they would empty their bank deposits to withdraw them as cash.
