Just Worked Out How To Crash The Banking System ...

[goldbug9999]

OK so Cantona had the right basic idea - mass withdrawal of cash, however the execution was flawed since it required mass coordinated action and for people to be willing to do something most of us rarely do any more - physically walk into a bank.

But there is actually a much easier way to achieve the same thing, here it is ...

Simply draw out all the money you spend on "day to day expenses" (food, fuel, etc etc) at the beginning of the month from the cashpoint and then buy all these things cash as you go.

Lets say this amount is £300, by doing this and assuming roughly even spending throughout the month you have increased the average amount of cash in circulation by £150. The "miracle" of fractional reserve banking means that you have reduced the amount of electronic money, to be gambled and skimmed by spivs, by around 100 times this amount. Doesn't require any coordinated action, just a slight change of habit.

So lets say 100k people did this relatively simple adjustment to their spending habits: 100,000 * 15,000 = £1.5 billion removed from the banking system.

Edited April 1, 2012 by goldbug9999

[Police]

1.5 Billion is chicken feed - and can be replaced at will.

[The Spaniard]

A recent blog post on the subject of UK cash from the positivemoney website:

http://www.positivemoney.org.uk/2012/03/nature-physical-cash-uk/

[Bloo Loo]

OK so Cantona had the right basic idea - mass withdrawal of cash, however the execution was flawed since it required mass coordinated action and for people to be willing to do something most of us rarely do any more - physically walk into a bank.

But there is actually a much easier way to achieve the same thing, here it is ...

Simply draw out all the money you spend on "day to day expenses" (food, fuel, etc etc) at the beginning of the month from the cashpoint and then buy all these things cash as you go.

Lets say this amount is £300, by doing this and assuming roughly even spending throughout the month you have increased the average amount of cash in circulation by £150. The "miracle" of fractional reserve banking means that you have reduced the amount of electronic money, to be gambled and skimmed by spivs, by around 100 times this amount. Doesn't require any coordinated action, just a slight change of habit.

So lets say 100k people did this relatively simple adjustment to their spending habits: 100,000 * 15,000 = £1.5 billion removed from the banking system.

They already dont have enough cash to pay the bills...Bail outs and QE helped to quell the issue.

These were "liquidity" problems.....so they said.

[bajista]

Simply draw out all the money you spend on "day to day expenses" (food, fuel, etc etc) at the beginning of the month from the cashpoint and then buy all these things cash as you go.

And leave everything else you have in the banking system? Hmm, what day is it?

[goldbug9999]

And leave everything else you have in the banking system? Hmm, what day is it?

Quite a high proportion of people dont have an "everything else".

[goldbug9999]

1.5 Billion is chicken feed - and can be replaced at will.

The figures I gave were just an example of the effect a small action by a relatively small number of people. At the moment we moan on here but play into the hands of the bankers by keeping such a high proportion of our day to day money use electronic.

[Self Employed Youth]

I withdraw 100% of my dole on giro day from the bank (dole must now be paid into a bank account - no two ways about it), unless I have a direct debit going out, then I leave enough in to cover it.

Not only are there effective tax rates exceeding 100%. Combine them with the cost of simple goods such as cars and houses and there isn't much point in saving up money. Better to stockpile food, fuel, seeds, durable goods etc. and wait for the new currency.

[TheCountOfNowhere]

Better still, go to your work on monday and demand to be paid in cash. We have somehow been forced/tricked/conned into giving the bankers every penny we earn.

I think withdrawing all your wages at the start of the month is a fine idea and I'm off down the bank now. At least if they did collapse you'd have some cash in your house to tide you by for a week or two.

Not sure how the bankers wangled us giving them ALL our money in the first place. I remember my mum and dad alkways being paid in cash. Also, don't they make money everytime you spend money on your debit card ?

[Executive Sadman]

The govt can print and give it to them, which they do.

Only way i see to crash it is for people just to refuse to do any business with banks, so it becames blatant there is no need or demand for them. Only then will the idiots at westminster get the message.

I closed my accounts a while back and have shifted to local building socs.

[markyh]

Simply draw out all the money you spend on "day to day expenses" (food, fuel, etc etc) at the beginning of the month from the cashpoint and then buy all these things cash as you go.

Lets say this amount is £300, by doing this and assuming roughly even spending throughout the month you have increased the average amount of cash in circulation by £150. The "miracle" of fractional reserve banking means that you have reduced the amount of electronic money, to be gambled and skimmed by spivs, by around 100 times this amount. Doesn't require any coordinated action, just a slight change of habit.

So lets say 100k people did this relatively simple adjustment to their spending habits: 100,000 * 15,000 = £1.5 billion removed from the banking system.

You are forgetting that many many households do all spending on creidt cards and use any spare income to pay off their credit card bill so have no "cash" spare to draw out.

Seems crazy but this is a true story, about 2 years ago had friends to dinner and they where complaining of getting further into debt and they asked how we managed to shop so cheaply. I explained we switched everything available from Tesco's to Aldi and Costco and pretty much halved our monthly shopping bills from £600 p/m to £300 p/m.

They thought thiss was well worth ago until I mentioned that Aldi and costco don't take credit cards so we draw out the £300 cash just after payday and budget it for the month the old fashioned way via a Jar in the Kitchen.

This then killed the dream dead for them as they said they are always overdrawn and a big chunk of their income each month went to pay off credit cards so they don't have £300 cash to draw out without hefty bank charges.

I tried to explain they should just pay £300 less off the creidt card each month, use that to be available in their overdraft to draw as cash and 1/2 their grocery bills. After several explanations they couldn't grasp the concept of this so I just left it.

Last i checked at Xmas they are now 1 years salary in debt on credit cards. Some people just can't shake the spend on CC and pay off as much of the CC bill each month ethos even as the debt's build and build.

M

[gadget]

This whole thread misunderstands the entire financial system...

If people use cash rather than credit / debit cards for purchases will make no difference. Just as quickly as people withdraw it, other people will bank it as the original people use the cash to buy stuff. The demand for cash may go up a bit but the BOE will simply print more cash to satisfy that.

Monthly flows of money are not the issue. To bring down the banks the people that have savings, ie have lent money to the banks need to withdraw it and keep bundles of cash (or gold etc) stashed under their beds. Happened a bit with the old dears in Japan over the last twenty years i think...

[MongerOfDoom]

Not sure how the bankers wangled us giving them ALL our money in the first place. I remember my mum and dad alkways being paid in cash. Also, don't they make money everytime you spend money on your debit card ?

Reality check? The problem is hardly that people deposit their money in bank accounts. That has worked fine for centuries now. Just why would anyone be worried about that when there is QE? The money given to bankers is deducted in taxes before you even receive your earnings, and there is a promise that this shall go on for decades as needed.

Could we not have some proper conspiracy rubbish that is at least plausible?

[winkie]

Bit like saying "what do petrol stations do when they run out of fuel"?

[Errol]

It's a good idea to use cash for everything anyway, simply for the benefit of remaining private/annonymous and outside the banking system.

[Traktion]

This whole thread misunderstands the entire financial system...

If people use cash rather than credit / debit cards for purchases will make no difference. Just as quickly as people withdraw it, other people will bank it as the original people use the cash to buy stuff. The demand for cash may go up a bit but the BOE will simply print more cash to satisfy that.

Monthly flows of money are not the issue. To bring down the banks the people that have savings, ie have lent money to the banks need to withdraw it and keep bundles of cash (or gold etc) stashed under their beds. Happened a bit with the old dears in Japan over the last twenty years i think...

The important point is that the money taken out at the start of the month is out of the banking system for the duration it is in your house/pocket.

Additionally, not using credit/debit cards prevents the banks creaming off transaction fees, especially if the shops re-cycle the cash via cash-back services (to avoid cash deposit costs).

That said, if the banks are short of cash, the BoE will soon step in and provide 'liquidity' if needed.

IMO, the only way to change the way the monetary system works, is to opt out of using state fiat/bank credit money altogether. Using something like Bitcoin where possible and holding savings in non-financial assets starves the beast and allows alternatives to flourish.

Bitcoin's value seems to have settled down somewhat (EDIT: although, there is still a lot of movement!) and the merchant infrastructure is starting to grow around it (such as Bit-Pay: https://bit-pay.com/, who hedge the fraud losses for about 1%, instead of around 3% for cards). In time, ripple style, distributed mutual credit systems will likely build on this further. However, you only need smart phones and a small app to swap Bitcoins already.

While the state is happy to print up bank losses, even using cash won't change much. Using completely different payment systems is the only real solution.

P.S. For those wondering how the Bitcoin services are coming along, there are some interesting vids from Bit-Pay, such as the one below. This example converts to USD, but the clients to transfer Bitcoins only are even simpler.

http://www.youtube.com/watch?v=3UmynaPg8hw

Edited April 1, 2012 by Traktion

[Traktion]

It's a good idea to use cash for everything anyway, simply for the benefit of remaining private/annonymous and outside the banking system.

Yup, agreed. I now take out a decent amount of cash out 2-3 times a month and just spend that.

As the state and their banking cartel seem to want to tighten their grip, it's my way of trying to wriggle free a little. It also starves the banks of their fees through their digital payment systems.

[Bloo Loo]

It's a good idea to use cash for everything anyway, simply for the benefit of remaining private/annonymous and outside the banking system.

paying by cash in the US makes you persona non grata...and probably a terrist suspect.

[wonderpup]

The bankers have already worked out how to crash the system- just create a mountain of unpayable debt and unbacked derivative obligations, sit back and enjoy the show as the hapless politicians run around like rats in maze trying to solve the unsolveable.

[Sour Mash]

1.5 Billion is chicken feed - and can be replaced at will.

Bank credit and money (cash) are two different things. Thanks to fractional reserve banking, the banks simply don't possess enough money to cover all the credit that they have issued.

I suspect that an extra £1.5 bn of money out of the system in any given month would indeed cause more than a few headaches for them.

[Police]

I suspect that an extra £1.5 bn of money out of the system in any given month would indeed cause more than a few headaches for them.

It's managed without any problem at christmas.

[RufflesTheGuineaPig]

OK so Cantona had the right basic idea - mass withdrawal of cash, however the execution was flawed since it required mass coordinated action and for people to be willing to do something most of us rarely do any more - physically walk into a bank.

But there is actually a much easier way to achieve the same thing, here it is ...

Simply draw out all the money you spend on "day to day expenses" (food, fuel, etc etc) at the beginning of the month from the cashpoint and then buy all these things cash as you go.

Can I have your address please?

[Sour Mash]

It's managed without any problem at christmas.

Christmas is predictable and things go back to 'normal' the next month. If people were to en-masse withdraw their monthly spending as needed as soon as they are paid, every month, it would put quite a strain on the banks finances as they would have to give out actual money (from their reserves) instead of promises.

The system just isn't set up to allow the masses to realise their bank credit as money. Banks trade on promises to pay, the idea is not to actually have to pay. They want us to just keep swapping their promise of payment for real life goods and services. Money itself of course is also just a promise to pay but it is backed by the government forcing people to pay taxes and fees in said currency. Bank credit is essentially a derivative of money.

Ideally for the banks there would be no such thing as physical cash - an agenda that is being strongly pushed.

[goldbug9999]

The important point is that the money taken out at the start of the month is out of the banking system for the duration it is in your house/pocket.

Exactly. The average amount in cash in circulation would rise dramatically, this would really hurt the banks since real money is their arch enemy

[Self Employed Youth]

What if there was an attack on the BoE printing facilities?