If people all decide to remove their money from a bank at the same time, does it have a serious economic impact?

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I ask because since our money is backed in value (a precious resource like gold and oil) and doesn’t leave the country, doesn’t it also mean that our wealth remains intact as a nation regardless of whether or not the bank has it? (Ie, us citizens have it, so it doesn’t matter if it’s in a bank or not- the wealth is held by a U.S. citizen).

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Anonymous 0 Comments

Not at all my field, but the way you posted makes me want to point out one thing: a bank works by people depositing their money there (for convenience, safekeeping and low interest), then the bank lends that money to other people who pay the bank a larger interest

So the bank cant just give all people their money back, which seems mostly like a precondition to your question

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