I bet you forgot about this, but we soon will be reminded of it in a big way:
If you’re a large bank and you’re overleveraged due to excessive assets to capital ratios (particularly assets that are at risk of losing value or default) there are three key issues you need to control.
1) You need to be able to value your assets however you please.
2) You need access to liquidity without lowering you asset to capital ratios.
3) You need to be able to stop bank runs or capital flights.
The Central Banks have already fixed #1 and #2 by suspending “mark to market” accounting standards and implementing QE, respectively. And thanks to rehypothecation, banks can sell assets to Central Banks via QE and still use those same assets as collateral on their derivatives trades.
That leaves #3: capital flights.
At the end of the day, no matter how many tricks the Financial Elites employ via accounting gimmicks and QE programs, depositors can still choose to take their money out of the banks and transfer it to physical cash.
Hence the call for cash bans, particularly of large bills.
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The bankgangsters are going to screw us again. They are nothing more than clever thieves. We should have put them in jail like Iceland did.