Topic: ~85% of money doesn't exist - page 2. (Read 527 times)

It's not "unaccounted for" it's precisely there in all the figures that you show. It doesn't need to be paper or coin based to exist, the electronic medium is just fine for storing money - it's the very basis that bitcoin uses to exist after all. Banks have worked this way for decades, if not centuries, where they take in deposits (savings) and lend out money based on that amount, to keep the money markets liquid. It only becomes a problem when people build up elaborate and fraudulent trading schemes but they all get figured out eventually. The world seems to function just fine with the current monetary structure and it's been using it for a long time, so it hardly seems broken.

Unfortunately, this is one of the biggest disadvantages of the banking system. There is no exact physical equivalent of the value that occurs due to the evaluation of money through various methods. In fact, more than 10-20% of the money in banks has no physical equivalent. Moreover, although money continues to be printed non-stop today unfortunately the rates are like this. The first information given in economics courses already proves this;

''If all individuals wanted to withdraw their deposits from their bank accounts at the same time, banks wouldn't be able to afford this and would even be pushed to the brink of bankruptcy.''

Cash use is restricted by the government mainly for the purpose of monitoring people's transactions, everyone else that the government has no interest in, especially in the US. Meanwhile, the same money is used by the Cartels in the USA for drug and weapon transactions. In the system, there is a lot of corruption that has been kept hidden. As the same fiat gets back to the government, some are flown to some of these countries to facilitate trade

One could argue fiat money is a scam. All you have is a claim on someone else's future labor, and as we've seen in the past, central banks can reduce that claim as much as they want by diluting the money supply. Also known as "Central Banks go BRRR".
Or, to quote Henry Ford:
It gets even better when you realize the "actual money" has no real value either. And that is exactly the reason why we don't have a gold standard.

In the Netherlands, they've been trying to make "calling for a bank run" illegal since 2010. As far as I can find, it's not illegal yet. More and more banks are now limiting cash withdrawals, and charging customers for it. It's like buying your own money.

With the world heavily relying on technology &  already going digital with everyday that goes by, use of physical money is slowing dying out as its believed to be much safer if you are cashless, no pick pockets etcetera though new threats of going digital loom which includes easy generation of new money by a small clique of corrupt people that have government control.

Otherwise crypto is so much better when it comes to transparency and accountability as every coin is accounted for unlike fiat that as an infinite supply as money is always printed to fill a few individuals pockets.

People are gradually going from cash to cashless and I even like this new ways of life. It might not only be in Europe but almost all part of the world. We are in the era of technology advancement. %85 of money that doesn't exist make the financial system of government to free from inflation. Because when there is more physical cash it reduce the value of money. The only thing that help an epileptic economy is scacity of Money. So hording %85 of money means of reviving the economy. Sometimes scacity of money we will make you not to be free from armed robbers, because when you don't have cash they will have no option rather than to only steal you chain mobile device but tampering your fund because its save in your account. It will save you the time to walk around the ATM to cue-up for cash but can perform multiply transaction at a time. So %85 of money that doesn't exist is a Good thing.

It is an integral part of the modern banking system, I don't know if a government can take another path out there that really implements all the banks under its regulations using a new system. If there is, it is indeed a bold policy and there may be external policy intervention from larger entities (on the scale of international relations).

CBDC mintable indefinitely, and doesn't mean the reserves are physical fiat. 85% in this context does not mean lost, but the reserve is questionable because of the striking difference between bank notes and bank digital money.

Guy do you think such a problem with fiat can be solved by Central Bank Digital Currency I mean I dont think we discussed fiat problem but where is the 85% of the money, the news is everywhere if the CBDC is adopting the crypto system it means will easy to track where is the money goes right?

Most of the money that you see are just numbers pulled out of thin air through the collaboration of the government and the banks. None of those are real, tangible money that can be held physically. That is also the basis of the bulk of the world's economy, and it's surprising that they keep on pulling this off for decades without much of the system imploding on its own frequently. Well, so long as there are people willing to follow orders blindly from the government, and agree that the money they are using is worth a certain something, I guess the system wouldn't collapse.

OP, people now prefer to invest their money instead of keeping it in cash, keeping cash is worthless to me, investing your money into different business is better, any cash in your possession wouldn't have any value until you make investment out it, it is even a risk to hold physical cash in the underdeveloped world, this might attract robbers to your house, the people that helped you be it bank or individuals that helped you to bring the money can give out out information, you may lose this money in a twinkle of an eye, but when you invest in bitcoin or even real estate your investment secured and profit driven.

thats not how it works

fractional reserve system is about not having to have 100% physical money ina  bank vault for security reasons of said bank branch

fractional reserve lending is a different fraction 'pot'. for different purpose. for different function and reason

but lets delve into it
banks do not take 10% of someones bank balance to lend out..

instead imagine a bank had 1000 customers of $7.5k each account ($7.5m)
the bank without touching deposit amounts has a separate facility to allow them to CREATE $750k of "loan" money
without taking any money from their customers..
think of it as not taking money from customers.. but more of a "heres how much we have in custody we will take a 10% risk bet and create new money to the amount of 10% of custody.. "

but they want the loanee to repay that amount so the bank can burn that money(lessen the interest) reopen/unlocked that risk allowance loan facility for the next loan

EG when 100 people ask for $1k ($100k) in a loan.. the banks facility can only make another $650k loans..
so if more loans were made but no money was returned they cant make new loans. as the risk allowance gets down to zero

what you find is. instead of customers deposits being used.. banks sell the already created, but not settled loan agreements to other institutions so that the other institutions pay in and burn that money to unlock the risk allowance.. and the loanee pays the other institution indirectly(im over simplifying)

bank customers balance is not locked, decreased, used to fill a lending pot. its just a risk measure of how much a bank can create a pot and create new money in it to a certain tolerance based on total value under custody

It's because of the partial reserve system that the banking sector uses which helps them generate money from thin air. If a bank gets 100 USD from a user it can keep 10 as a reserve and use 90 to give a loan. The actual figure for this money distribution is backed by $100, but the total amount of money owned by the bank is 190 dollars. So their total wealth increased to 190 dollars, which is backed by only 100 dollars and 90 dollars they just generated by using the partial reserve system. All the banks in the world follow this system. 

Although Bitcoin provides a decentralized alternative, its stability and mass acceptance remain unknown. Furthermore, its price volatility calls into doubt its efficiency as a dependable store of value. Furthermore, questions regarding the concentration of money and power inside the cryptocurrency field remain. While conventional fiat currencies have problems, they also provide stability and are supported by established governments' resources and economic policies. Finding a happy medium between the benefits of decentralized currencies and the stability afforded by established financial systems is a difficult task. It's crucial to critically evaluate both options and consider the broader economic implications before placing too much reliance on any single solution.

Many of the members who wrote here are surprised because most of the money is not printed, but they take it for granted that there is a real risk of extinction of bills and coins if the CBDCs succeed, and I'm almost sure that most of them pay with credit card even the most casual purchase.

If more physical money doesn't exist is because with a 15% seems to be enough (it shouldn't, but...).

Everything is accounted for; that's the role of the central bank. Any money that will be created or destroyed is just like a plus or minus on their books. Maybe the right description is that 85% is not in circulation for use by the majority of the people, as mentioned; it's used by big corporations and banks for their business purposes.

The nominal digital money printed by the bank is used by people everywhere who accept and buy, so without control and utilized by washing assets by people with personal interests, in my country I also talk about the exchange rate is different from every month from what is obtained and I feel that its existence is increasingly absent, I believe that bitcoin is a good effort to recover from the exchange rate privately and in my opinion is not controlled by anyone, if the bitcoin growth rate can increase in the next few months with will enter the halving period, I think the money in a country will be a little saved with people more confident to increase their investment with bitcoin, my hope is that there will be a positive economic impact from the impact of an economy that has been polluted or manipulated by certain parties.

cash and coins is M0

M1 includes M0, plus digital transferable amounts 'in circulation' of basic deposit accounts
M2 includes M0+M1, plus amounts including short terms savings accounts, escrows and other certificates of deposits

M3 and M4 are the more complex measures of the previous plus as you go up the scale things like pension pots, long term savings, share portfolios and bank reserves

The bright side of this is that the awareness of bitcoin and cypto currencies will became more meaningful, it'll affect the adoption more positively. The world will gradually begin to accept the inevitable presence of digital cash, that'll inevitably phase out physical fiat currencies.

As OP has stated, it is easier for government officials and perhaps Banks to scam the economy, all they need do is corroborate with others concerned to add to the digits of money in supply. The excess will go to them, while the ordinary citizens bears the pain of inflation that will follow.

This is why I respect the creator of bitcoin, for estimating when the last bitcoin will be mined in the future. By this there'll be no question of whether excess bitcoin will be minted, more than it's total supply.

I don't really have any problem with printing money as long as the money is well used . . Printing money only becomes a problem when it's used mostly for consumption or for things that are of low quality. The low quality part also affects Bitcoin, while fake bitcoins could be indirectly used to lower the price/value of real Bitcoin.
This is why it's important to have solid law enforcement to prevent such abuse . Without it there is nothing much you can do, even for Bitcoin. Our strong support (which is temporal) for certain fiat currencies like US Dollar means there will be less of such abuse, as eyes are on them, coupled with strong law enforcement. Euro may benefit from this depending on whether the managers and the economy of participating countries continue to share similar value with USD managers & economy.

In my opinion, this is not surprising. The market is provided with money in its various forms as much as it needs. Moreover, cash and non-cash money have equal power in the financial world. In connection with the digitalization of money, the ratio of cash and non-cash money will continue to change towards an increase in the volume of non-cash money and a decrease in the total amount of cash. Money replaces goods that are in civil circulation. And what form this money will take is not significant.