What if the bank runs out of money?
If you don't understand how our monetary system works, here's one of the main rules.
The bank never goes bankrupt! Did you read that? We have seen this rule in practice in 2008 when banks were saved with 'new' money, because they were 'too big to fail'. Has anything changed since 2008? The only thing that is different now is that banks have been capitalized by the central banks with enormous amounts of 'new' fiat money. Exactly as rule #11 from the board game Monopoly describes.
We all know that the thing about Monopoly is that if you play it according to the rules only one player is having fun, right? Let that sink in for a moment...
Fiat money is inherently worthless, yet it is worth something because we all believe it is worth something. Our faith in our fiat money is the only value it has.
But it wasn’t always this way and it is not certain it will always be this way in the future. Even a strategist from Deutsche Bank stated this week "We may be looking at ‘the start of the end of fiat money’". He also said:
“it’s possible that inflation becomes more and more uncontrollable and the era of fiat currencies looks vulnerable as people lose faith in paper money.” ~ Deutsche Bank’s Jim Reid
Just remember, a dollar from 100 years ago is worth about $0.02 in today's money...
Image source
In 1913, the US government gave birth to the Federal Reserve System (AKA the Fed) and placed them in charge of protecting the value of the US dollar. Since then, the purchasing power of the US dollar has declined by approximately 98%.
As the founder of Ford, Henry Ford, once said:
“It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” ~ Henry Ford, Founder, Ford Motor Co.
Blockchain based money with a limited or fixed supply such as Bitcoin could be that revolution in my opinion. There was no alternative in 2008 when banks were too big to fail. Without banks there was no easy way to pay each other. This made Satoshi Nakamoto think and Bitcoin was born. Nowadays, we don't need the banks to make fast worldwide payments anymore. When the next financial crisis hits Bitcoin could be the revolution Henry Ford was talking about.
If you're still 100% invested in fiat currencies, think about an exit plan.
New day new high! Don't miss opportunity!
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You may be interested in reading my Pocket Change Theory... As per Article 1, Section 8 of the U.S. Constitution, Congress has the Power to Coin Money and Regulate the Value thereof... I think we're due for a RESET of our U.S. Coinage...
... ...$7.77 ... ...1 vote ... ... .... Reset
@pocketechange
Banks do not run out of money they create more fiat money. But I guess not even 1 country can back all its paper money with real assets. I believe the system will keep working unless people wake up and start doing some sort of trading, barter and swaps that are out of the financial system. @originalworks
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Some similarity seems to be present here:
https://www.brainyquote.com/authors/henry_ford
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But, Steem is fiat, since it will always produce more Steem.
I enjoyed reading your post. There is a lot of good stuff.
Money are just a simple convention and an agrement between different parts. For example one beer costs lets say one dollar because i agree to pay that amount, if nobody will buy that beer then the true value of it is 0...
You know what will be great... if Steem will replace the fiat money around the world.
Imagine that!😉
Banksters and Politicians are partners in crime, and both are scared of cryptocurrencies, because it would bring doom to them!
How can banks run out of money, when they can just type a few numbers in a PC and thus, create as much money as they feel like...!?
Thinking about the banking system makes me sick. Can't wait until Bitcoin and the blockchain becomes mainstream. I think governments are just trying to slow it down right now until they can get a horse in the race. Its no longer whether or not blockchain is going to take over, its more a question of when.
Congratulations @penguinpablo! You have received a vote as part of @raserrano donation to this project.
I will be able to help more #minnows
@OriginalWorks @steem-untalented