RED ALERT- Negative Bank Reserves

Discussion in 'Economics' started by Digs, Jan 30, 2008.

  1. Digs


    "USA Banks in aggregate have now burnt through all of their capital and are forced to borrow reserves from the Fed in order to keep lending."

    This means –
    The banks in aggregate have NO CAPITAL
    When you deposit your CASH, they can’t let you withdraw it unless they borrow money to do it.
    You will here more ARABS and ASIANS injecting funds into USA banks

    Not looking good at all… watch out if there is a run on banks
  2. Yeah, so?

    I don't know why this is such a red alert when this was brought to light in the Federal Reserve H.3 Report back on January 16th.

    Yes, it is a distressing issue and one that needs urgent attention, however as long as we keep our heads buried in the sand it should go away, right?

    Keep in mind the Fed is one step ahead of you having already instituted safeguards to prevent a run on the banks.

    At Citibank for example you can deposit $100,000 and only Inter Institutional Transfer out $10,000 in any given month. Don't believe me? See for yourself:

    Why do you think the fed has instituted purchase limits on savings bonds?

    Despite the explanation the real reason is for the individual saver to maintain their deposits at the local commercial bank as opposed to seeking a safe haven in direct participation in US Treasuries.

    With all due respect I hate to tell you this Digs but that train has already left the station. If your just noticing this now once again you've been left on the platform holding your bags.

  3. Digs


    .."At Citibank for example you can deposit $100,000 and only Inter Institutional Transfer out $10,000 in any given month. Don't believe me? See for yourself:"...

    You got to be kidding me... I put my monies in a bank and the STATE (FED) limits my freedoms with what I do with it.

    These laws wont last while there are riots in the streets.

    I suggest that these regulations are good reason to PANIC.

    Any way why arent you walking down the street with banners and protesting out loud !!!

    Shout out load ..FREE MY FUNDS, FREE MY FUNDS

    Or are we all a bunch of lambs for the chopping block !!!
  4. I want to say I don't believe it, but maybe I just don't want to believe it. I checked out that document. So you're saying that the reason for this is liquidity issues? The first thing that occurred to me was anti-money laundering/terrorist funding reasons.

    Anyhow, if you're right and this has something to do with liquidity, it would be stunning (to me, anyways).
  5. Mr Pain

    Mr Pain

    This is for a transfer, you can withdraw it, just not transfer it. I agree this looks more like anti money laundering rules than anti panic rules.

    As far as the article, this was the key part “U.S. non-borrowed bank reserves have gone from $37B to $199M (nope, that's not a typo) in the last month.” I don’t see a run but I can see why the fed keeps dropping rates. If they don’t, lending stops dead. The only mortgage anyone will get is from a bank to buy a REO.
  6. Geez, use a wire transfer; a certified check, or just go get the greenbacks. The sky is not fallling, Chicken Little. This only deals with ACH transfers.
  7. Digs


    Focus on this point ..USA BANKS ARE INSOLVENT

    Me being a chicken little is not the point.
  8. Mr Pain

    Mr Pain

    Or you could say they have maximized their potential to make a profit. They make money on the difference between what they lend at and pay. Having lots of $ sitting in a vault does not make them money. As long as the Feds say they will insure $100k and there is no wide scale bank run, it’s not a problem.
  9. Mvic


    BAC has a $10K monthly ACH limit also, has had for at least a year, nothing unusual about that.
  10. The only thing that would get Americans rioting in the streets is if cheezy, salty snacks are outlawed. Or "American Idol" gets cancelled. I'm sorry to say it but there's no more fat, lazy, stupid bunch of complacent morons on earth than we Americans. Okay, maybe the Europeans.

    The government could sell a license to corporations to execute people in the street for the sake of medical research and people here would just take it like the dumb turds that they are.
    #10     Jan 30, 2008