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In addition to the other responses here, the US government (through FDIC) guarantees that you won't lose your money in a bank account if something bad happens t
by mdorazio 7y ago
In addition to the other responses here, the US government (through FDIC) guarantees that you won't lose your money in a bank account if something bad happens to the bank. That's a lot more important than most people give credit for.
- icebraining 7y agoThat gives value to the banks, not to the currency. I could create my own currency and give you the exact same guarantees as the FDIC (since I can always print more), yet that wouldn't give it value, because all you get is more units of the same thing. If you disagree, I have some $IBs to sell you, and an insured account to store them!
- pmiller2 7y agoNo, it doesn’t give value to the banks. Banks only have value because you can use them to store and borrow money which has value. Your theoretical bank has no value because your theoretical currency does not, either. FDIC insurance reinforces the value that banks (and the currency one can access through them) already have.