“The same is true anywhere in the world — only about 10% of your cash is at the bank. They just depend on the fact that everyone won’t want his at the same time.”
Then how can they take the 40% from depositors, even from a limited number of depositors who are subject to the 40%. Is there even enough cash in reserve to cover the 40% withdrawals? Remember, the 40% fee is based on total deposits above the $100,000, not the total fractional amount in reserve. Unless I’m missing something here, do these socialists ever realize the consequences what they’re doing? Or more than likely they just don’t care.
They aren't taking actual cash; they're removing the obligation to pay the depositors back (and issuing worthless stock certificates for the difference). The whole deal is to make the bank's balance sheets look better, not to raise actual cash.
No. This is a bookkeeping exercise.
do these socialists ever realize the consequences what they’re doing?
They do realize that if they just let the banks fail [like they should], the bank-to-government gravy train will be in danger.