Jeff Walton
👤 SpeakerAppearances Over Time
Podcast Appearances
And what do you get for it?
Not really anything.
Not much.
You don't get anything for it, okay?
And what is protecting your bank deposits?
Well, the bank's balance sheet is protecting your bank deposits.
Have you ever looked at a bank balance sheet?
Maybe you have.
Not anytime recently.
No, you haven't.
You don't know the like, look at the liabilities relative to the assets that banks are holding.
Banks are like 90% leveraged and they're rehypothecated and you don't know what the rehypothecation looks like.
And so what's backstopping the liquidity of your dollars at the bank, it's the bank's balance sheet, which is thin.
And then aside from that, it's the FDIC.
Well, the FDIC is 70x leveraged over on deposits.
So what's the reality of storing money in a bank?
The reality of storing money in a bank is that you're going to get it inflated away.
You are paying risk premium to the FDIC via inflation.