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Going Virtual

CJKAllstar
Posts: 408
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8/13/2014 2:11:34 PM
Posted: 2 years ago
At 8/13/2014 8:21:52 AM, BrownChickenBrownCow wrote:
Most people I know use debit cards and not physical money. What are the negatives of all money going virtual?

Well it is more susceptible to hackers/failures, but the biggest negative is that banks utilise fractional reserve banking and invest a lot of your money, effectively turning your cash from something completely liquid to an asset. So there is a chance the bank could fail with your cash and you'd lose it or at best force huge amounts of government spending to save the bank. And there are a multiple ways for a bank to fail with your cash. Ways I'm not informed enough economically though.
"Political language... is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind." - George Orwell
slo1
Posts: 4,364
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9/2/2014 3:21:28 PM
Posted: 2 years ago
At 8/13/2014 8:21:52 AM, BrownChickenBrownCow wrote:
Most people I know use debit cards and not physical money. What are the negatives of all money going virtual?

Solar storm could knock everyone off line for year or more. We had a near miss two years ago that I just learned a few months ago. Yikes!

http://science.nasa.gov...
Osiris_Rosenthorne
Posts: 82
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9/3/2014 10:46:46 PM
Posted: 2 years ago
At 8/13/2014 2:11:34 PM, CJKAllstar wrote:
At 8/13/2014 8:21:52 AM, BrownChickenBrownCow wrote:
Most people I know use debit cards and not physical money. What are the negatives of all money going virtual?

Well it is more susceptible to hackers/failures, but the biggest negative is that banks utilise fractional reserve banking and invest a lot of your money, effectively turning your cash from something completely liquid to an asset. So there is a chance the bank could fail with your cash and you'd lose it or at best force huge amounts of government spending to save the bank. And there are a multiple ways for a bank to fail with your cash. Ways I'm not informed enough economically though.

Well, if all cash is virtual, banks would lose their function, as no currency would be deposited in the first place, leaving nothing for the bank to use as a security for a run, as it would not need to be liquid, as it were. The only real function banks would have really is facilitating exchanges, I think.
I probably hate everything you stand for - and on.