I think he needs to go away quietly somewhere and learn how to read financial accounts. He could start with NAB. And then he needs to ask himself a few questions.
firstly, the NAB accounts. Total debt is $764 billion. Of which $357 billion is on demand and term deposits, which is where the Mum and dad unsecured loans sit. Of which, according to APRA’s monthly banking stats, $126 billion is from households. How much actual cash, i.e. stuff that can physically be withdrawn from the bank? $919 million. Less than $1 billion. So it doesn’t take much of a drop in confidence in a bank’s stability to cause it to become insolvent by running out of cash and being unable to pay its debts as and when they fall due.
Question. Why do people put money in the bank? For some, security. For most, income. If you had to pay the bank to look after your money, would you lend it to them? No, you lend it to them in the expectation that they will pay you interest. If you don’t realise that this entails risk on the bank’s part, that any investment they make on your money’s behalf could fail, you don’t understand how the system works and shouldn’t be writing such fearmongering articles. Because banks ARE gambling with your money. That is why you gave it to them. Of course, you might see that you can get better interest rates somewhere else, like Banksia Financial Group. “Stuff the greedy banks” you say, “I won’t be conned by those rip-off merchants”. And then they go bust, because they’ve gambled recklessly.
And banks can’t earn money unless they lend it out (gamble). They can’t borrow $126 billion from mums and dads, let it sit risk free in their vaults and still pay interest.
So, what do you want to happen if your bank fails? Lose all your money, or at the very least have it tied up in insolvency proceedings for thirty years until the last mortgage payments have been made and you get back the final payment of 50¢ (or 30¢, 20¢) in the $ which after 30 years of inflation will be next to nothing, or a govt. mandated package which gives you something now plus ensures that the system continues to function, so you can still by everything on your debit/credit cards, ‘cos you don’t have the cash?
of course, what he wants is for everyone to have free cash, to have their cake and eat it. Welcome to socialism.
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