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If I was a billionaire I would readily pay 1-5 million dollars a year to a bank that would guarantee an entire 100 million dollar account by not lending out any
by Scalene2 4y ago
If I was a billionaire I would readily pay 1-5 million dollars a year to a bank that would guarantee an entire 100 million dollar account by not lending out any of the money. This would of course have to be a bank that didn't lend out any money at all and existed entirely to server individuals that didn't want their money held in a bank that used fractional reserve banking.
- prottog 4y agoWho keeps $100mm in cash? This is a solution to an imaginary problem.
- mikeyouse 4y agoNot even a great solution either. For zero risk and zero out-of-pocket cost, you could just find a broker on commission to ladder you in 30-day T-Bills and manage the purchases.
- drinkzima 4y agoI don't understand why you would do this when short term Treasuries or money market funds exist. There are far better solutions than what you suggest.
- ericpauley 4y agoIt really makes no sense. The bank's "cash" is really just database entries with the Fed anyway, why not loan the money to the Fed overnight (reverse repo) at 5%? The reason GP's dream doesn't exist is because MMs do effectively the same thing and pay you.