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This may be a stupid question...but is there a paper dollar corresponding to every dollar I have in my bank account? I always assumed that some of the currency
by iambateman 7y ago
This may be a stupid question...but is there a paper dollar corresponding to every dollar I have in my bank account?
I always assumed that some of the currency issued by governments was exclusively digital.
- pixl97 7y agoNo, most is digital, but there have been some interesting attempts https://en.m.wikipedia.org/wiki/Trillion-dollar_coin https://en.m.wikipedia.org/wiki/Trillion-dollar_coin
- jdc 7y agoMost banks are required to keep 10% of the deposits https://www.investopedia.com/terms/f/fractionalreservebanking.asp https://www.investopedia.com/terms/f/fractionalreservebankin...
- rabuse 7y agoThe accounting is tied to the Federal Reserve by mere bookkeeping for the bulk of it. If the banks are short on cash, they have the fed just print it for them.
- iambateman 7y agoThis is what I imagined and would seem to prevent the vault-size problem. Interesting.
- marcell 7y agoYou don’t have dollars in your bank account, you have your banks promise to give you dollar if you ask.
- dragonwriter 7y ago> but is there a paper dollar corresponding to every dollar I have in my bank account? No. > I always assumed that some of the currency issued by governments was exclusively digital. They aren't even really issues by the government for the most part. While government policy shapes the framework in which money is created, much is created by private lending.