What Happens If Your Bank Runs OUT OF MONEY?

What Happens If Your Bank Runs OUT OF MONEY?



what's up everybody I am dust but it's saying I welcome to the minority mindset you know what's really weird yeah uh this cardigan yeah besides that so I just went to the bank to deposit a check and when I went to the teller and handed her the check she told me that I will be able to access my money whenever I want after 48 hours have you heard something like that before its standard banking talk but it's not the full truth so in this video I want to talk about your bank your money and what happens if your bank runs out of money because yeah banks can run out of money and before we get into it pause this video and leave me a comment below with what you think happens if your bank ran out of money and we'll compare answers oh and maybe a thumbs up too so pause this video leave me a comment we'll compare answers in just a little bit and now I have my handy-dandy extra-large Blue's Clues notepad to help explain how it works so you have one thousand dollars that you go and deposit in your bank when you deposit your one thousand dollars in the bank your money doesn't just sit in the bank's drawer or in the bank's vault because that would be a losing transaction for the bank the bank takes your money and they invest it and the way they invest it is by lending it out to other people so your bank might lend your money out to John they'll lend it out to George and they'll lend it out to Nancy and then John George and Nancy will pay the bank and interest plus your principal and they'll typically pay somewhere between five to twenty five percent interest on their loans or lines of credit and their credit cards and then the bank will pay you a very small nominal interest somewhere like 0.1 percent or two percent on your deposits so this is a simplified version of how it works I don't want to get too complicated because what actually ends up happening is the banks use something called fractional reserve lending where they work with the Fred Reserve Bank and the turn near $1,000 into $10,000 out of thin air by printing money and then they loan out $10,000 instead of $1,000 but if you understand this concept you will understand what we're talking about in this video so you get the idea right you take a bunch of $20 bills that equal a thousand dollars and you go to the bank and you deposit it and you think that you can get your cash back at any time but that's not exactly true because after you deposit your $20 bill your bank will give this $20 bill to somebody else so if you go to withdraw $20 you'll still get $20 back it just won't be the same bill that you deposited earlier on big whoop don't write who cares which $20 bill you have like the serial numbers on the bill don't mean anything as long as you have $20 in your hand right I mean $20 is worth $20 yeah most of the time it's not a problem but you will care if the bank runs out of money so now if we go back to the same example as earlier where you deposit $1,000 in the bank the bank works with the Federal Reserve to turn your $1000 $10,000 and then the bank loans it out to John George and Nancy and now watch this P al ot plot twist the economy turns bad and now John lost his job and he's behind on his payments George has declared bankruptcy and Nancy hasn't made a bank payment in months now all your money is gone it's been lent out and your bank isn't getting any of their money back so now if you go back to the bank and you say hey bank I want my $1,000 back they'll say no problem what they'll do is they'll take this guy right here but a meet who deposited a thousand dollars in the bank last week they'll take his thousand dollars and then they'll give it to you so now you've got your $1,000 back John George and Nancy got money from the bank which was originally yours and they're not giving it back to the bank so the bank is missing this money they're missing your money and now if but meet wants his $1,000 back well then the bank was hard to take this guy right here or a girl they'll take this person's money and they'll try to give it back to permit you can see it gets a little confusing and this might be able to go on fine for a little while but you can see the bank is running into some choppy waters so if this chain of losing money keeps happening with the bank eventually your bank will become insolvent and they will run out of money and your bank will have to close the doors and if you didn't already pull your money out no more you'll be gone if you've ever heard of a bank run this is exactly what it is everybody's running to the bank trying to get their deposits out before the bank shuts down now you might be thinking oh just breathe that's so unlikely that's only happened like a few times in the last hundred years but that's not exactly true the FDIC keeps a record of total bank failures and bank insolvencies and between 2000 and 2009 teen there haven't been 10 bank insolvencies or 50 bank insolvencies or a hundred bank insolvencies or even 500 Bank of solvent seized there have been 555 bank failures over those 19 years to put that in perspective 555 bank failures over 19 years average is about two and a half bank failures a month but you do need to understand that if your money isn't a bank and your bank shuts down you're not completely out of luck like if people found out that their life savings were gone there would be panic and unrest and riots and nobody wants that which is why the FDIC was created which is the Federal Deposit Insurance Corporation which protects your savings and your deposits up to two hundred and fifty thousand dollars it's insurance so if your bank closes down the government will come in through the help of the FDIC and pay you whatever your deposits were up to two hundred and fifty thousand dollars while that's very important to prevent chaos the FDIC insurance does come at a cost because the government doesn't have any money to begin with the government gets their money to pay back these deposits through taxpayers and tax dollars and now that I think about it the FDIC would be a very interesting video topic that being said you never want to run into an issue where you don't know where your money is which is why financial education and investing is so so important and if you want to learn more I'll link a video in the description below where you can learn more about investing thank you for watching if you enjoy their video hit that thumbs up button and share it with one friend so we can help spread the word don't miss their new videos on entrepreneurship business and money every Wednesday and Friday at 7:30 a.m. Eastern Standard Time so it's a subscribe button and the notification bubble oh yeah well you actually find out when a new videos are released and always keep hustling

39 thoughts on “What Happens If Your Bank Runs OUT OF MONEY?

  1. Thank you for watching! If you enjoyed this video, you should watch – How The Banking System Is Making You Poorer (Without You Finding Out): https://youtu.be/C7osfyLO23w

  2. I can smell him from here. That turban is offensive and very upsetting. I have no idea what the hell this video is about due to the fact I am distracted by a bed sheet meticulously wrapped around his greasy hair and expect to see bugs crawling out of that rats nest on his neck.

  3. If a bank runs out of money, your kinda screwed. Unless they can generate more from deposits/accounts, reclaim from loans, or can be backed up by another bank or the government, the money is lost.

  4. HEY J , QUICK QUESTION, I ENJOY WATCHING YOUR VIDEOS! KEEP UP THE GOOD WORK! WOULD A VENDING MACHINE BUSINESS BE CONSIDERED SELF EMPLOYED OR BUSINESS ORDER? JUST CURIOUS BECAUSE OF TAX REASONS!

  5. They’ll close for a while and will reopen with fresh new money printed out of their printing machine.

  6. They request money from the central bank… If the central bank runs out of money, then they print some, or they ask credit from other cantrys or from the IMF.

  7. The whole thing falls apart with digital money. It won't last long. It can't. People will realise money is worth absolutely nothing and can be controlled easily at the top. The tech has a back door. They can get in. They can type digits. I got my money out last year. We are close close close to many failing banks. Remember they bailed them out in 2009. Nothing changed. The only reason our system is standing is because the fed flooded QE money to keep them all afloat. However we the people will have to sacrifice many generations to life long slave labor to pay this off. Our system is done. Get out now while you still can. Watch for housing bubble pop. Everything pops after that except precious metals. Who holds will be far better off. This will happen. It history repeating. It is in fact a system. We are at the end of this one. These events have literlly repeated 1000s of times in hundreds of nations. They can not just "print the money" forever. There will be no chairs left and no music. The game ends the same every single time. This system has never done anything different. In the end it always collapses the same way.

  8. They are alteady all out of money lol. What do you think 23 trillion debt is? They loan money they don't have, they sell precious metals as paper that they don't have. The banks are the institutions that have aided in the theft of all Americans maoney. And the ones that profit from our suffering and slavery. I made a bank run last year. I only use the bank to cover bills. I store my wealth in PM and protect it with my own personal defense.
    In fact the last time i was ROBBED and money was STOLEN from me is when my bank made a policy that allows them to bounce checks legitimately and charge me excessive over draft fees. They hold money that comes in to cover checks, cash the highest check first and bounce every single transaction after that. Even if the highest check came in later than the small ones. Poof their predatory policy cost me groceries for that week. We ate sandwiches so we could make it.
    Stolen money. I decided to run the bank after that. They steal money from people daily. Every one is a victim of this. Banks need to GO. They are the biggest drains on this country.

  9. Guys watch Mike Maloney hes got very informative videos on this topic
    (Not trying to take viewers away from this channel just trying to share info)

  10. If the bank ran out of money…… get bailed out? Give the ceo a raise. Add some more zeros, keep 1/10 – 1/100th of actual cash on hand and then act surprised when that back fires when the economy collapses

  11. If your bank runs out of money if it is fidc insured you will receive up to 250,000 from the federal government to replace your funds

  12. Bank of England, 2014 Quarterly Bulletin: Whenever a bank makes a loan it simultaneously creates a matching deposit in the borrowers bank account, thereby CREATING NEW money.

  13. If my bank runs out of money I'd b screwed cause I'll lose all my money & the bank won't b able2️⃣pay it🔙2️⃣me

  14. I thought that when banks 🏦 ran out of money… that didn’t mean that an individual would lose his money 💰🤷🏽‍♂️🙃😅

  15. I find it interesting millions of people coming into the U.S. each year, illegal/legal… The deficit must increase substantially to keep pace for support of the population. 1million people × $20,000 salary =$20 billion. Higher wages entails more debts. Course they all need a place to live so bank borrowing is at least 100billion at just a 100k.

    Economy has been interesting excessive amounts of new jobs alongside mass closures of places.

    Real question is does federal deficit matter? Money must be added to economy for continuos growth… Only thing I don't understand is how government ran positive paying the treasury back…it would seem that it was individuals with debt and not the government at the time we didn't have a federal deficit.

    The whole system seems to manipulated and not directly impacted despite 20+ trillion debts.

  16. Banks could go insolvent due to their investments going south…. "it's important that you know how to invest" (so you can lose it yourself?) lol

    But no, just kidding.

  17. The gangster who robs a bank goes to jail for many years….
    The bankster can rob the whole city ( what happened in greece before) and people can wait for hours to get 20 euros out of the atm…

  18. If the bank runs out of money, it will get a loan from the Federal Reserve or central bank. Now I will see if I'm right.

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