Although the $2 billion only represented 4% of its deposit base, thousands of customers withdrawing their savings from UK’s fifth-biggest mortgage lender, Northern Rock, looked like a scene from the Jimmy Stewart movie, "It’s a Wonderful Life".
If depositors knew how little currency banks kept on hand, they’d be worried all the time. Their money has been loaned out to make more money–that’s what banks do. As one old man said, "They’d better not loan out any of mine" and went to get his.
When he found out he could withdraw all he had in his account, he said– "Well, if I can get it, then I don’t want it."
People who are poor know all about not having money. They live their whole lives that way.
When people who are rich find themselves about to lose a whole lot of money, they panic. They are not happy with the United States for exporting their subprime loans over there.
Let’s see what Bernanke has to offer this coming week.
ARTICLES and ANSWERS 2020 