>Aren't you contradicting yourself? You just said "redemption" had nothing to do with it. First of all, I didn't say redemption "has nothing to do with it". I

>Aren't you contradicting yourself? You just said "redemption" had nothing to do with it. First of all, I didn't say redemption "has nothing to do with it". I did use the word redemption, but in a completely different context than you. To reiterate: people are trying to obtain dollars in a bank run, not get rid of them. They're trying to exchange their bank IOUs (chequing accounts), which are worthless if the bank collapses, for FRB IOUs, which will still have value. >A bank doesn't give me an IOU when it gives me a loan; it gives me actual money. Nor does it give depositors IOUs; they can get actual money in exchange for their deposits any time. Umm, a chequing account with deposits is a bank liability (IOU). And you can't get money in exchange for your deposit at any time, account dependent. Your chequing account? Sure. That's why you receive a negative rate on it net of fees. Again, you don't even seem to have a grasp of day-to-day personal banking. Follow the balance sheet transactions for a loan, watch how the assets and liabilities move around. If you can't even do that, why are you arguing about this stuff?