Why Bitcoin is ultimately doomed to fail (not today or tomorrow) - page 3.

anth0ny

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Quote from: deisik on February 20, 2014, 02:01:51 PM

If you are really curious about that percentage (i.e. the ratio of demand deposits to term deposits or the inverse relationship), we could approximately calculate it here (for Russian economy). On rough estimates, demand deposits compose less than one third of term deposits for individuals...

So my guess is correct, lol

I didn't realize you were guessing. Thanks.

So I guess savings accounts and other non-checking accounts which are payable on demand would also have to have full reserves.

And I guess you're right that this means banks would have to charge (more than currently) for deposits.

anth0ny

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Quote from: deisik on February 20, 2014, 01:53:51 PM

Quote from: anth0ny on February 20, 2014, 01:41:02 PM

Quote from: deisik on February 20, 2014, 01:39:53 PM

Quote from: anth0ny on February 20, 2014, 01:34:28 PM

Quote from: deisik on February 20, 2014, 01:21:14 PM

So the full reserve banking as you see it (i.e. encompassing only demand deposits) can't possibly prevent bank runs in the majority of cases, lol...

What about full reserve banking which encompasses all checking, savings, and time deposits, as well as all money market mutual funds?

Why is this funny?

This point has already been addressed by me previously (which you obviously have forgotten). In this case, banks would turn into money warehouses, and depositors would have to pay banks for storing their money (since they couldn't loan it and thus earn interest)...

Well yeah, of course.

But we wouldn't have any bank runs, right?

Wrong. That's why I'm telling you that even 100% reserve banking won't help you. If we take as a basis the definition that you've given, then bank runs could still happen (i.e. the depositors trying to withdraw their funds immediately), but since there is no loaning (the money is in the money warehouse all the time), there will be no significant negative effects, if any, on the economy and no bankruptcies...

Well, you're right that it's theoretically possible, but it'd eliminate the vast majority of bank runs, would it not?

Remember, part of the definition is "fearing that their bank will be unable to repay their deposits in full and on time". You agree with that definition, right?

deisik

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If you are really curious about that percentage (i.e. the ratio of demand deposits to term deposits or the inverse relationship), we could approximately calculate it here (for Russian economy). On rough estimates, demand deposits compose less than one third of term deposits for individuals...

So my guess is correct, lol

deisik

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Merit: 1280

English ⬄ Russian Translation Services

Quote from: anth0ny on February 20, 2014, 01:41:02 PM

Quote from: deisik on February 20, 2014, 01:39:53 PM

Quote from: anth0ny on February 20, 2014, 01:34:28 PM

Quote from: deisik on February 20, 2014, 01:21:14 PM

So the full reserve banking as you see it (i.e. encompassing only demand deposits) can't possibly prevent bank runs in the majority of cases, lol...

What about full reserve banking which encompasses all checking, savings, and time deposits, as well as all money market mutual funds?

Why is this funny?

This point has already been addressed by me previously (which you obviously have forgotten). In this case, banks would turn into money warehouses, and depositors would have to pay banks for storing their money (since they couldn't loan it and thus earn interest)...

Well yeah, of course.

But we wouldn't have any bank runs, right?

Wrong. That's why I'm telling you that even 100% reserve banking won't help you. If we take as a basis the definition that you've given, then bank runs could still happen (i.e. the depositors trying to withdraw their funds immediately), but since there is no loaning (the money is in the money warehouse all the time), there will be no significant negative effects, if any, on the economy and no bankruptcies...

deisik

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Quote from: anth0ny on February 20, 2014, 01:38:26 PM

Quote from: deisik on February 20, 2014, 01:36:33 PM

Quote from: anth0ny on February 20, 2014, 01:31:50 PM

Quote from: deisik on February 20, 2014, 01:30:06 PM

It seems that almost the same question was already asked by me. Do you want me to quote it?

You asked the question? Does that mean you don't know the answer?

It was you who pretended that "their (Northern Rock) subprime mortgage business involved loaning out demand deposits". So it is actually your responsibility to prove the point...

Sorry about that. I withdraw my point.

Quote from: deisik on February 20, 2014, 01:36:33 PM

I've given strong logical reasons why demand deposits (checking accounts) for individuals should be much less than time deposits (saving accounts). It is obvious that the exact percentage will be different even for the same bank at different times...

So you don't know?

For a given bank, it is impossible to tell unless you work in the bank. On the economy scale though, you could use monetary aggregates to calculate the averages for that economy, but these aggregates (how they are calculated) are different between economies...

anth0ny

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Activity: 196

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Quote from: deisik on February 20, 2014, 01:39:53 PM

Quote from: anth0ny on February 20, 2014, 01:34:28 PM

Quote from: deisik on February 20, 2014, 01:21:14 PM

So the full reserve banking as you see it (i.e. encompassing only demand deposits) can't possibly prevent bank runs in the majority of cases, lol...

What about full reserve banking which encompasses all checking, savings, and time deposits, as well as all money market mutual funds?

Why is this funny?

This point has already been addressed by me previously (which you obviously have forgotten). In this case, banks would turn into money warehouses, and depositors would have to pay banks for storing their money (since they couldn't loan it and thus earn interest)...

Well yeah, of course.

But we wouldn't have any bank runs, right?

deisik

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Quote from: anth0ny on February 20, 2014, 01:34:28 PM

Quote from: deisik on February 20, 2014, 01:21:14 PM

So the full reserve banking as you see it (i.e. encompassing only demand deposits) can't possibly prevent bank runs in the majority of cases, lol...

What about full reserve banking which encompasses all checking, savings, and time deposits, as well as all money market mutual funds?

Why is this funny?

This point has already been addressed by me previously (which you obviously have forgotten). In this case, banks would turn into money warehouses, and depositors would have to pay banks for storing their money (since they couldn't loan it and thus earn interest)...

anth0ny

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Activity: 196

Merit: 100

Quote from: deisik on February 20, 2014, 01:36:33 PM

Quote from: anth0ny on February 20, 2014, 01:31:50 PM

Quote from: deisik on February 20, 2014, 01:30:06 PM

Quote from: anth0ny on February 20, 2014, 01:28:41 PM

Quote from: deisik on February 20, 2014, 01:21:14 PM

Quote from: anth0ny on February 20, 2014, 01:03:49 PM

OK, but you agree that full reserve banking would prevent the vast majority of bank runs, right?

No, I can't agree with that. As I told you earlier, checking accounts make up only a small portion of individuals' money held in deposits in the majority of banks.

Really? What percentage? What's the rest?

It seems that almost the same question was already asked by me. Do you want me to quote it?

You asked the question? Does that mean you don't know the answer?

It was you who pretended that "their (Northern Rock) subprime mortgage business involved loaning out demand deposits". So it is actually your responsibility to prove the point...

Sorry about that. I withdraw my point.

Quote from: deisik on February 20, 2014, 01:36:33 PM

I've given strong logical reasons why demand deposits (checking accounts) for individuals should be much less than time deposits (saving accounts). It is obvious that the exact percentage will be different even for the same bank at different times...

So you don't know? Obviously I'm not asking for an exact figure to the penny.

deisik

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Quote from: anth0ny on February 20, 2014, 01:31:50 PM

Quote from: deisik on February 20, 2014, 01:30:06 PM

Quote from: anth0ny on February 20, 2014, 01:28:41 PM

Quote from: deisik on February 20, 2014, 01:21:14 PM

Quote from: anth0ny on February 20, 2014, 01:03:49 PM

OK, but you agree that full reserve banking would prevent the vast majority of bank runs, right?

No, I can't agree with that. As I told you earlier, checking accounts make up only a small portion of individuals' money held in deposits in the majority of banks.

Really? What percentage? What's the rest?

It seems that almost the same question was already asked by me. Do you want me to quote it?

You asked the question? Does that mean you don't know the answer?

It was you who pretended that "their (Northern Rock) subprime mortgage business involved loaning out demand deposits". So it is actually your responsibility to prove the point...

I've given strong logical reasons why demand deposits (checking accounts) for individuals should be much less than time deposits (saving accounts). It is obvious that the exact percentage will be different even for the same bank at different times...

anth0ny

full member

Activity: 196

Merit: 100

Quote from: deisik on February 20, 2014, 01:21:14 PM

So the full reserve banking as you see it (i.e. encompassing only demand deposits) can't possibly prevent bank runs in the majority of cases, lol...

What about full reserve banking which encompasses all checking, savings, and time deposits, as well as all money market mutual funds?

Why is this funny?

anth0ny

full member

Activity: 196

Merit: 100

Quote from: deisik on February 20, 2014, 01:30:06 PM

Quote from: anth0ny on February 20, 2014, 01:28:41 PM

Quote from: deisik on February 20, 2014, 01:21:14 PM

Quote from: anth0ny on February 20, 2014, 01:03:49 PM

Quote from: deisik on February 20, 2014, 06:55:01 AM

Even with full reserve banking on, banks are not guaranteed from problems that could provoke bank runs. Financial panic doesn't discriminate between good and bad banks...

OK, but you agree that full reserve banking would prevent the vast majority of bank runs, right?

No, I can't agree with that. As I told you earlier, checking accounts make up only a small portion of individuals' money held in deposits in the majority of banks.

Really? What percentage? What's the rest?

It seems that almost the same question was already asked by me. Do you want me to quote it?

You asked the question? Does that mean you don't know the answer?

anth0ny

full member

Activity: 196

Merit: 100

Quote from: deisik on February 20, 2014, 01:23:32 PM

Quote from: anth0ny on February 20, 2014, 01:03:49 PM

A run on a bank occurs when a large number of depositors, fearing that their bank will be unable to repay their deposits in full and on time, simultaneously try to withdraw their funds immediately." http://www.econlib.org/library/Enc/BankRuns.html

Even this definition emphasizes that depositors 1) are afraid that the bank will be unable to repay their deposits, and 2) will try to withdraw their funds immediately

Do you agree with that statement?

deisik

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Quote from: anth0ny on February 20, 2014, 01:28:41 PM

Quote from: deisik on February 20, 2014, 01:21:14 PM

Quote from: anth0ny on February 20, 2014, 01:03:49 PM

Quote from: deisik on February 20, 2014, 06:55:01 AM

Even with full reserve banking on, banks are not guaranteed from problems that could provoke bank runs. Financial panic doesn't discriminate between good and bad banks...

OK, but you agree that full reserve banking would prevent the vast majority of bank runs, right?

No, I can't agree with that. As I told you earlier, checking accounts make up only a small portion of individuals' money held in deposits in the majority of banks.

Really? What percentage? What's the rest?

It seems that almost the same question was already asked by me. Do you want me to quote it?

anth0ny

full member

Activity: 196

Merit: 100

Quote from: deisik on February 20, 2014, 01:21:14 PM

Quote from: anth0ny on February 20, 2014, 01:03:49 PM

Quote from: deisik on February 20, 2014, 06:55:01 AM

Even with full reserve banking on, banks are not guaranteed from problems that could provoke bank runs. Financial panic doesn't discriminate between good and bad banks...

OK, but you agree that full reserve banking would prevent the vast majority of bank runs, right?

No, I can't agree with that. As I told you earlier, checking accounts make up only a small portion of individuals' money held in deposits in the majority of banks.

Really? What percentage? What's the rest?

deisik

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Merit: 1280

English ⬄ Russian Translation Services

Quote from: anth0ny on February 20, 2014, 01:03:49 PM

A run on a bank occurs when a large number of depositors, fearing that their bank will be unable to repay their deposits in full and on time, simultaneously try to withdraw their funds immediately." http://www.econlib.org/library/Enc/BankRuns.html

Even this definition emphasizes that depositors 1) are afraid that the bank will be unable to repay their deposits, and 2) will try to withdraw their funds immediately

deisik

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Merit: 1280

English ⬄ Russian Translation Services

Quote from: anth0ny on February 20, 2014, 01:03:49 PM

Quote from: deisik on February 20, 2014, 06:55:01 AM

Even with full reserve banking on, banks are not guaranteed from problems that could provoke bank runs. Financial panic doesn't discriminate between good and bad banks...

OK, but you agree that full reserve banking would prevent the vast majority of bank runs, right?

No, I can't agree with that. As I told you earlier, checking accounts make up only a small portion of individuals' money held in deposits in the majority of banks. So the full reserve banking as you see it (i.e. encompassing only demand deposits) can't possibly prevent bank runs in the majority of cases, lol...

MICRO

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CEO @ Stake.com and Primedice.com

"Only 21M" ? Well by that time we will deal in satoshys

They will be worth enough Wink

. Hihihi...

anth0ny

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Activity: 196

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Quote from: deisik on February 20, 2014, 06:55:01 AM

Quote from: allaa on February 20, 2014, 06:18:19 AM

Quote from: anth0ny on February 01, 2014, 12:17:32 PM

Quote from: deisik on February 01, 2014, 12:16:11 PM

From your posts I got the idea that fractional reserve banking (full reserve banking being an ideal) would somehow prevent bank runs. Do you confirm that?

Absolutely not.

it would make them more expensive to point it would be unprofitable to "run" them any more

Even with full reserve banking on, banks are not guaranteed from problems that could provoke bank runs. Financial panic doesn't discriminate between good and bad banks...

OK, but you agree that full reserve banking would prevent the vast majority of bank runs, right?

"A run on a bank occurs when a large number of depositors, fearing that their bank will be unable to repay their deposits in full and on time, simultaneously try to withdraw their funds immediately." http://www.econlib.org/library/Enc/BankRuns.html

Do you agree with that?

deisik

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Quote from: allaa on February 20, 2014, 06:18:19 AM

Quote from: anth0ny on February 01, 2014, 12:17:32 PM

Quote from: deisik on February 01, 2014, 12:16:11 PM

From your posts I got the idea that fractional reserve banking (full reserve banking being an ideal) would somehow prevent bank runs. Do you confirm that?

Absolutely not.

it would make them more expensive to point it would be unprofitable to "run" them any more

Even with full reserve banking on, banks are not guaranteed from problems that could provoke bank runs. Financial panic doesn't discriminate between good and bad banks...

allaa

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Activity: 25

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Quote from: anth0ny on February 01, 2014, 12:17:32 PM

Quote from: deisik on February 01, 2014, 12:16:11 PM

From your posts I got the idea that fractional reserve banking (full reserve banking being an ideal) would somehow prevent bank runs. Do you confirm that?

Absolutely not.

it would make them more expensive to point it would be unprofitable to "run" them any more

Topic: Why Bitcoin is ultimately doomed to fail (not today or tomorrow) - page 3. (Read 40872 times)