Will banks Run Out Of CASH? Do you want to take a Chance?
Y2KNEWSWIRE.COM cash computer
Will banks run out of cash? You decide!
You've been wondering whether the banks will really run out of money or if the Y2K cash scare is just hype. Well now's your chance to find out what will really happen, based on your own assumptions. We've researched bank deposit obligations and cash reserve numbers from the Federal Reserve. We've nailed down workforce statistics, average hours worked, and average hourly wages. We've checked and double-checked all the numbers here, and we're giving you the web link to every source we quote.
First, some facts:
U.S. banks owe $3.34 trillion in deposits to customers. Source: Federal Reserve, February 12, 1999 report
U.S. banks currently hold $49.36 billion in cash. Source: Federal Reserve, February 12, 1999 report
$38.557 billion is currently being used to meet reserve requirements. Only $10.8 billion is surplus cash. Source: Federal Reserve, February 12, 1999 report
There are 139 million workers in the United States. Source: Bureau of Labor Statistics
These workers work an average of 34.5 hours / week at an average hourly wage of $13.04. Source: Bureau of Labor Statistics
This means $62.5 billion / week is paid to U.S workers. That is approximately $250 billion / month when considering two weeks' vacation during any given year. Source: calculations based on numbers given above
There are 102.5 million households in the United States. Source: U.S. Census Bureau
71.1% of these households own interest-earning assets at banks (primarily savings accounts) of approximately $3000. 8.6% own approximately $13,000 in other interest-earning money (primarily money market funds, securities, etc.) That comes to $218.6 billion in savings accounts and $114.6 billion in money market funds. Source: U.S. Census Bureau, 1993 numbers. These are the most recent numbers available. Likely, investments in money market funds are much higher today.
Banks currently owe businesses* approximately $3.1 trillion in deposits. This is calculated by taking the total deposits of $3.34 trillion and subtracting the known deposits attributable to households ($218.6 billion).
Now, it's your turn: Simply answer the questions below, using the numbers you think best represent reality. Press "calculate" and our on-line, real-time cash computer will do the math and give you the results. You must enter numeric values in all fields for the engine to work correctly.
In this simulation, we present four areas in which people and companies might withdraw cash:
To have day-to-day cash for purchasing the basic necessities.
To protect their savings and investments.
For companies to have enough cash to meet January, 2000 payroll.
For businesses* to protect their $3.1 trillion in deposits
Day-To-Day Cash
Some people are planning on taking cash out of the banks or cashing out their December paychecks in order to have extra cash set aside for day-to-day needs. This is often based on the assumption that checks, credit cards or ATMs may not be fully reliable. Many people are considering having at least enough cash to make it through one month, covering the mortgage or rent, food, gasoline, and various utility bills. The American Red Cross is currently recommending approximately a one week supply of cash. Other organizations are recommending more, and most banks are recommending none. A one-week supply of cash, for the average American family, is $449.88. How much money, in dollars, do you think the average adult, working American will have on-hand to cover day-to-day cash needs?
Cash to have on hand for day-to-day needs:
$
Example: 3000
Protecting Savings
The average American household has approximately $2133 in savings (that's 71.1% of $3000) and $1118 in money market funds (that's 8.6% of $13,000). Due to anticipation of possible bank failures or disruptions, some are planning on withdrawing their savings accounts in order to protect their savings. What percent of their savings do you think each household will choose to withdraw in cash?
Savings withdrawal percentage:
%
Example: 10
Cash to meet payroll
Some employers (i.e. business owners) are planning on withdrawing cash before or during December, 1999, in order to make sure they can meet payroll in January, 2000. What percentage of employers do you think will withdraw, on average, a two-week supply of payroll cash for this reason?
% companies to withdraw two weeks of payroll cash:
%
Example: 15
Protecting Business* Deposits
Businesses have deposited $3.1 trillion in U.S. banks. Out of concern for protecting their deposits, what percent of these deposits do you think the average business will want to withdraw in cash in addition to the 'cash to meet payroll' withdrawals?
Business deposits withdrawal percentage:
%
Example: 5
Assumptions:
In your opinion, will the Federal Reserve make available the promised $50 billion in extra cash during 1999?
YesNo
In your opinion, will the Federal Reserve make available the extra $150 billion they claim to have stockpiled?
YesNo
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