From Bill Bonner, Chairman, Bonner Partners:
Please remember this warning when you go to the ATM to get cash… and there is none!
While we were thinking about what was really going on with today’s strange new money system, a startling thought occurred to us.
Our financial system could take a surprising and catastrophic twist that almost nobody imagines, let alone anticipates.
Do you remember when a lethal tsunami hit the beaches of Southeast Asia, killing thousands of people and causing billions of dollars of damage?
Well, just before the 80-foot wall of water slammed into the coast an odd thing happened: The water disappeared.
The tide went out farther than anyone had ever seen before. Local fishermen headed for high ground immediately. They knew what it meant. But the tourists went out onto the beach looking for shells!
The same thing could happen to the money supply: Cash could evaporate suddenly and disastrously – just before we drown in it.
Here’s how… and why:
If you look at M2 money supply – which measures coins and notes in circulation as well as bank deposits and money market accounts – America’s money stock amounted to $11.7 trillion as of last month.
But there was just $1.3 trillion of physical currency in circulation – about only half of which is in the U.S. (Nobody knows for sure.)
What we use as money today is mostly credit. It exists as zeros and ones in electronic bank accounts. We never see it. Touch
Article source: http://thecrux.com/bill-bonner-the-day-the-atms-run-out/