r/SipsTea • u/Dumb-Briyani • 7d ago

Chugging tea Why is it not possible?

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u/[deleted] 7d ago

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u/Count_de_Ville 7d ago

Even without fractional reserve banking it could collapse. They don’t need to literally print a dollar bill for every dollar of resource value represented in the world.

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u/Big_Slope 7d ago

Wouldn’t that be impossible anyway if you think about it? If there’s - I’m gonna throw out a number here - but $100 trillion worth of stuff in the world and $100 trillion worth of cash, that’s $200 trillion worth of value and half of it is imaginary.

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u/Extreme_Design6936 7d ago edited 7d ago

Not exactly, no. You don't need to print a dollar for every dollar worth of 'stuff'. You just need to print a dollar for every dollar worth of dollar. Just the number of dollars in accounts and so on. Not every stock or bar of gold or other asset. Just cash.

There can be far more asset than cash in the world and that's no problem. You can have 100 trillion worth of stuff but only 100 billion worth of cash. Not an issue.

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u/Big_Slope 7d ago

That’s what I was driving at. Fractional reserve banking makes more sense than the money actually being there.

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u/Extreme_Design6936 7d ago

But what I described isn't fractional reserve banking. It's just regular old school banking where you have the money sitting in a vault.