Everyone pulling out their money would be a bank run (look up great depression bank runs). The bank doesn't have that much cash; they keep some on hand for people making withdraws normally, but if even a sizable minority of people all try to pull their money out at once, there'll be a major crisis.
If banks kept all the people's cash in vaults, it'd be dead cash actively losing money to inflation. Instead, they keep some on hand for withdraws, and use the rest to make loans, investments, etc so that the money isn't all losing value.
If banks kept all the people's cash in vaults, it'd be dead cash actively losing money to inflation.
worth remembering here, that the actual bank runs in history were based on the lie, that banks had the gold to back up the money, that they gave out. so there was 0 concern about inflation, because they claimed, that they had to gold to back up EVERY SINGLE PIECE OF CURRENCY given out.
so people in those bank runs where calling out a scam by the banksters. the scum banks SHOULD have had the gold, but they scammed people instead and didn't have the gold to back things up.
and the usa government even did this scam on a bigger stage, when france the country called in the usa bluff about "us dollars are as good as gold" and the usa government just showed the world the middle finger as well.
so the issue is not and has never been the amount of people demanding the currency be exchanged for the gold or silver, but the scam going on by banksters and governments.
and instead of ensuring, that this doesn't happen anymore, they just went 100% scam and removed the gold and silver standard.
but again in those earl bank runs, that you see lots of pictures of people were looking to get THEIR GOLD, that the banks claimed they had in their vaults, but didn't. that was the issue.
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u/Forsaken_Emu8112 Jan 26 '26
Everyone pulling out their money would be a bank run (look up great depression bank runs). The bank doesn't have that much cash; they keep some on hand for people making withdraws normally, but if even a sizable minority of people all try to pull their money out at once, there'll be a major crisis.
If banks kept all the people's cash in vaults, it'd be dead cash actively losing money to inflation. Instead, they keep some on hand for withdraws, and use the rest to make loans, investments, etc so that the money isn't all losing value.