possible collapse of fractional reserve bankin

'morning,

this is taken from this morning's e-letter from Urban Survival - http://urbansurvival.com/week.htm

The table 2 mentioned can be viewed in the Fed Reserve's report at http://www.federalreserve.gov/releases/h3/Current/

George Ure's thoughts -


"Collapse of Fractional Reserve Banking: I must be reading the Federal Reserve's H.3 "Aggregate Reserve of Depository Institutions and the Monetary Base" all wrong. If you scroll down to Table 2 and look at the not-seasonally adjusted figures for the "Reserves of depository institutions" you will see three columns on the left. Total (Reserves) "nonborrowed (reserves) and "required" (reserves).

The shocker is that the preliminary January 16th number showed that the required reserve of banks was $39,989 million dollars. This means how much money the banks claim to have on hand as their portion of the 'fractional reserve' banking system is (ballpark) $40 billion.

OK, the third column says the amount of reserves they are required to have by the Federal Reserve is only $38,278 million. (*$32.3 billion, ballpark).

OK, I've saved the scariest for last: Column #2. It says the amount of nonborrowed money (*money that the banksters didn't have to borrow to meet their reserve requirements) was negative. In other words, if I am reading this right, the whole fractional reserve banking system's reserves required is being held afloat strictly by borrowed money at this point!

I've heard about people wanting to take money out of this account or that (*in major brokerage firms so far) but being told they may have to wait a week to get their money, but if I am reading the H.3 report right, that might soon happen to banks - and the specter of Bank Holidays may be on us sooner than we might like. The sharp-eyed readers who sent this along to me said they went back through the history of the Fed to 1959 and could find no similar event, but hey, maybe this will be massaged out when the next Fed H.3 update is released. You better pray it is. ....." - article continues .


fwiw

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