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The sheer amount of money withdrawals from Canadian banks was massive. There appears to have been a 500% increase just in the previous 24 hours. This is the problem with politicians. They are simply UNQUALIFIED to make such decisions. They have no idea that freezing accounts will undermine the confidence in the banking system,
Trudeau has created a very serious crisis and just rescinding his Emergency Act is not going to make it all better. Trudeau has driven a stake through the heart of the Canadian economy and that means that international capital will be skeptical about trusting Canada as long a Trudeau is in power.
Thanks Joel
Mike Maloney explained the fractional reserve system and I think it means that for every one dollar withdrawn the banks have to either cash in 9 dollars of other assets or call in 9 dollars of loans. It works nicely for the banks when it’s deposited, they can loan out 9 dollars for every one dollar deposit, but when there’s a net outflow of cash as withdrawals, and lots of it, the result is similar to being maxxed out in an margin account and your asset value drops. I guess the fractional reserve system is just like a 9x margin account for banks and Trudeau just caused their portfolio to collapse. And they can’t sell their “positions” because they’re customer deposit accounts that they don’t own!
It doesn’t work that way.
Another piece of proof that Trudeau and Freeland and the rest of his supporters, including Jagmeet Singh, are complete idiots. Do they think of the consequences of their actions? Never. They are above such trivialities. We gotta take our country back before there is nothing left of it.