moonbat1775

WaMu and More: Uninsured Depositors Begging for Trouble

With an honest banking system, bank runs would be impossible. The bank would either tell you, "Sorry, but you agreed for us to lend out your money; come back in x-months and we will give it to you then." or "Here it is sir, we kept it safe for you."

To loan out money obtained from CDs is honest, to loan out money from demand (e.g. checking) accounts is DISHONEST.
Besides dishonesty, the boom-bust cycle has been traced to fractional (fraudulent) reserve banking. Read Murray N. Rothbard and von Mises for details.

WaMu and More: Uninsured Depositors Begging for Trouble

I deposit money in a checking account. That money is available to me at any time. Hence it is called a "demand" deposit. The bank then LOANS about 90% of that money out. Anyone smell anything rotten?

A system built on ignorant confidence is a "con" game. Any wonder it is unstable?