Total deposits as a percentage of assets on hand at the end of September at the country's more than 8,700 insured banks and thrifts reached the lowest level since the Federal Deposit Insurance Corp.

What they dont say here is that assets have appreciated almost at an exponential rate along with lending in real estate and they are do for a correction so when the value of the assets come down the deposits as a percentage of assets will rise.





[edit on 13-1-2007 by etshrtslr]

Okay I gotta ask...why will this cause hyperinflation?

Originally posted by mel1962
I think this will pave the way for the collapse of the dollar and hyper inflation.

I don’t see how…Why keep money in a low interest bearing bank account?

People are able to transfer money electronically with little effort or cost and seek to get “highest and best use of capital”. Personally, I can wire money into my checking account from various other diverse contributions in higher interest bearing sources while sitting at home or over the phone.

Banks make money from securities, credit card transactions and issuances, fees etc. as well as loans. But the need for a high deposit balance is non-existent and quite frankly imo, wasteful.

mg

Don't banks need deposits to loan? Isn't that what banks do? Loan your money, for a small fee, to make a big fee?

Without your money, what do they have to loan?

Originally posted by nextguyinline
Without your money, what do they have to loan?

The money banks loan out is just digital money "borrowed" from the Federal Reserve at the discount rate or other banks at the federal funds rate. The banks just have to keep a low percentage of their total loans on deposit with the Federal Reserve.

[edit on 1/13/2007 by djohnsto77]

Originally posted by nextguyinline
Don't banks need deposits to loan? Isn't that what banks do? Loan your money, for a small fee, to make a big fee?

Without your money, what do they have to loan?

That's one of the reasons why the FDIC insures accounts up to 100,000 dollars. Because the banks DON'T keep the amount of cash on hand to cover everyones deposits at any given time.

The news itself isn't that scary, the banks would just like more cash deposits on hand. The actual amount of money (which is "digital") isn't really in question

guess what, when the big oil heads get together the dollar will devalue even more. and oil prices will rise. you will pay, pay, pay. sounds like fun, aye, well it is to get worse. hopefully congress does not ennact the 18-42 draft for people to go to iran or wherever else.

the local banks, even nationwide banks, can get more deposits
if they'd"
pay out higher rates for borrowing your money
Also, curtail the 'fuzzy'/unethical/rip-off fees they assess the depositers

but what the Banks & their bevy of lawyers & PACs will push through is:
the (hands held out) lawmakers (whom we elected?), will decide on new/revised guidelines which stipulate that the Banks will need only a cash reserve of 1% of 'accounted' cash deposits to legally lend an amount that is 99% more than what they have on hand. {if you can follow that, then you should excell in the tax lawyering profession...& that's the truth!}

basically, the bankers are 'poor mouthing', putting out the desperation sloganeering...
not for the sake of a better America, or a better economic structure....
no, the bankers want to reap profits as excessive as ,, lets say CitiCorp or GoldmanSacs as examples
( neither of those Corps. are doing anything illegal or unethical...they're just making outrageous profits at their clients expense)

i'm myself caught in the system, BofA, gets my automatic deposit every month, so their accountants can juggle their 'holdings', and every month
when i write 2 checks max. they 'charge' me a $3. fee to keep my free checking account going...i guess thats to cover my electronic transfers that were supposed to be free too?
~whadda load of baloney~ bankers & politicians are the bottom of the barrel...but well off!