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A letter to my bank

Dear Sirs,

In view of what seems to be happening internationally with banks at the moment, I was wondering if you could advise me correctly…

If one of my checks is returned marked ‘insufficient funds,’ how do I know whether that refers to me, or to you?

via

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8 thoughts on “A letter to my bank”

  1. want to know real terror? FDIC insured means that the government will guarantee that if you put less then about 100k in a bank that you will be able to get your money. Do you know why? Banks only keep about 40-60% of the total amount of money that they have been given by people on hand at anytime. So where does the money go? Well, the banks lend it out. So basically banks lend your money out to someone else they charge them a high intrest rate a small portion of that interest rate gets returned to the customers and the rest goes to them.There are a few prolbems with this.

    If you put more money in the bank then I do most of the time we are still paid the same intrest rate. No real investment company would ever be able to get away with this. The larger sum you invest the higher the interest returned to you. The second problem is that these loans are backed up by the government. So what is the actual cost of someone defaulting on their loans for the bank? No much. So if my bank makes a bunch of bad loans your tax payer money is going to be used to prop up my bank account.

    Where does the government get that backup money? If a bunch of people in my little town get nervous about our bank and do a run on it what happens is the bank pulls in money from the central area’s bank. A much bigger bank with lots more money. Here is the thing: that bank has to keep a lower amount of money on hand then my bank does. They might only have 25% on hand at anytime. So if there is a county-wide run on the bank much more quickly will the money become exhausted. Which brings us up to the state bank which has even a lower rate and finally the true central bank that has almost no money on hand. All that stops this from happening is the fact that state governors usually order banks to close when the run on the bank starts. however, no that almost any bank transaction can be done online were in an interesting problem.

    Finally if your upset about this bail-out (read subsidy) just bare in mind one thing. You already subsidies banks. You pay for the FDIC stuff and banks are given free money all the time by inflation. When the government wants to stimulate (read inflate because it can pay its debt) the economy it does so by either literally giving the banks more freshly printed money or allowing them to decrease the amount of money they keep on in hand.

    Remember this next time you get a fee from your bank for having bounced a check. There getting free money from your tax-payer money, and they are continuously in debt.

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