[nickelcitymario]

> The FDIC would force the bank into receivership and return the insured money to account holders.

Fair point. If a run-on-the-bank only occured at a single bank, that would work. And that's probably a more fair comparison to my example of everyone taking out their money at all the banks.

But for clarity, my statement was that the money to cover everyone's deposits at all the banks simply doesn't exist. The FDIC can only cover so much insured money before they just plain run out.

[jellicle]

The USA can print as many dollar bills as needed, right? But Tether cannot.

[perl4ever]

The paper currency doesn't exist. Why would you think the _money_ doesn't exist? As long as the banks aren't in fact fraudulent, the assets are there. I guess it's easy to trust in fraudulent banking if you have an unassailable belief that fake banks are the norm, but they're not. That's what people have spent thousands of years figuring out how to avoid.

[joshfraser]

And if the FDIC didn't have enough money, the government would start printing it like crazy and the US would start looking more like Venezuela in a very short period of time.

[bluquark]

Bank collapses happen during times of deflation. In that environment, printing money like crazy just returns the financial system to normal, low levels of inflation.

[gamblor956]

Small amounts of inflation are a good thing. Deflation in a currency is almost always bad, and this is why limited-issue crypo like bitcoin will never replace real currencies.

[shkkmo]

Venezuela has more significant issues than "printing money like crazy"

[nickelcitymario]

Thank you. I shoulda just said "Venezuela", because it's the perfect modern example.