submitted 6 months ago by collapse_already@lemmy.ml to c/chapotraphouse@hexbear.net

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I am not much of an implementers, but if we wanted to do something to target and reform our screwed up society, I have an idea. The great vulnerability of our capitalist culture, especially in the U.S. and Western Europe, is fractional reserve banking.

For those that don't know, a quick summary is that any given bank only has to keep a small percentage of their deposits on hand. This allows them to invest other people's money for fun and profit. Many resources explain the concept and its evils in far more detail than I can get into here.

So how is this an exploitable weakness? Well, if you have seen It's a Wonderful Life, you probably already know. Because banks only hold a fraction of the reserves needed to cover their depositors' accounts, they are vulnerable to "runs." A run on a bank happens when the customers lose confidence that the bank will be able to cover their deposits and rush to withdraw their money before the bank runs out of money (FDIC insurance was setup to protect depositors from this phenomenon).

How do we use this to fight the bankstas? We deliberately cause runs on banks. Of we can get enough people to withdraw their money from a bank, the bank won't be able to return people's money to them. Even if you don't have an account with the target bank, you can help by spreading fear (Big Bank is the targetof an internet attack, ge yourmoneyout before they collapse - you don't want to have to wait for the FDIC to give you your money, do you?) An additional collateral attack than can be made is to simply not pay any debts (mortgages, credit cards, etc) owed to that same bank. The non-payments will accelerate the time frame for which the bank will run out of money.

Also, if you short the bank's stock before the run or when it starts, you can profit from the banks collapse.

The real key to the plan (the part I haven't figured out yet) is how do we get enough people to panic over a particular bank to get the party started. Subsequent banks should be easier after the first.

Be aware that some states have laws that make inciting a run on a bank illegal, although the constitutionality of such laws is still up for debate. Truth is a defense to libel, so if there is an attempt to sue for that, you get to conduct in depth discovery on the financial condition of the bank (just how bad are all of those loans and derivative instruments they hold? How low is their cash in hand compared to their depositors receipts?)

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[-] peppersky@hexbear.net 11 points 6 months ago

how would you get people to do something like this that has like less than zero immediate positive impact on their lives?

[-] replaceable@hexbear.net 11 points 6 months ago* (last edited 6 months ago)

How is inciting bank runs (which i doubt we could achieve) in any way activism?

[-] GaveUp@hexbear.net 8 points 6 months ago* (last edited 6 months ago)

accelerationism into societal collapse seems to be their goal

[-] GinAndJuche@hexbear.net 8 points 6 months ago

Presumably there is the baked in notion that causing one would harm the system.

[-] Sodium_nitride@lemmygrad.ml 5 points 6 months ago

With the advent of Central banks, causing bank runs, especially by a few activists is basically impossible. If you tried to pull something like this off, all you will do is cause the bank to borrow money from the central bank, although it will never come to that point because realistically enough, you won't get enough people on board to withdraw cash from the bank.

And say even if you somehow succeeded in causing widespread banking collapse, well, American capitalism thrived after 2008. So it is unclear what exactly would be accomplished. In order to bring about a revolution, you have to build a revolutionary movement. Otherwise, you are just spreading chaos for no reason.

[-] Aradina@lemmy.ml 3 points 6 months ago

All this would achieve is making people less likely to run on the bank later. Not enough people would be convinced, and everyone would want to be smug the next time. Crying wolf isn't usually a great plan.

[-] infuziSporg@hexbear.net 3 points 6 months ago

Well, if you have seen It's a Wonderful Life, you probably already know.

My good fellow, this is an Motion Pickture from seventy years erst. Personally, I really want to do a Catch Me If You Can, but I don't entertain that specific fantasy in any seriousness.

Also, if you short the bank's stock before the run or when it starts, you can profit from the banks collapse.

In addition to how you've mentioned that making a run on a bank is legally restricted, this point here is insider trading. While it's cool and good in this case, it means you would need 10,000 people, each with 100k in investments, to all keep a secret.

I hope you have people to casually chat with, to bounce ideas off. No one has a perfectly balanced mind, and we all benefit from being informed by each other. This sort of post is the sort of thing that has its place in casual chats.

[-] thebartermyth@hexbear.net 2 points 6 months ago* (last edited 6 months ago)

I'm pretty sure FDIC gives the bank money rather than individuals. Very rich people sometimes do targeted bank runs for profit, the SBV collapse is a good example. It mostly works when corporate deposits exceed FDIC because hypothetically they won't get it back (in practice they did iirc). Sorta tangentially, I think banking law people were worried(?) hopeful(?) that this sorta negates the privatize banking system broadly. Cause essentially SBV, and any bank, was backed by the fed as 'too big to fail'. Idk everyone just stopped talking about that aspect of it a couple weeks later and it was never resolved. (lol)

Doing a bank run is hard though, because to do it you need to exceed the bank's reserve, which is hard even as a group. Plus, it kinda doesn't benefit the people doing it, right? Like if you did a bank run it would collapse and you'd need to apply for an account at a different bank. Maybe they'd even know you did a bank run and not accept you. (Probably not IRL, but hypothetically). You can't really profit off of the bank collapsing unless you have a lot of money / leverage / etc.

An additional collateral attack than can be made is to simply not pay any debts (mortgages, credit cards, etc) owed to that same bank.

Debt strikes are much easier to coordinate. It's still really really hard, but it's easier because people tend to have a lot of debt. It's still very risky for the people doing it. The gambit is essentially for the bank to settle for less than the total debt.

E: also maybe check out The Debt Collective