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Gas lines and bank runs
Posted on 5/10/21 at 9:04 pm
Posted on 5/10/21 at 9:04 pm
Observation: Both 1970s style gas runs and 1929 style bank runs are examples of economic behavior that is rational on an individual basis but irrational in aggregate.
Gasoline and money starts becoming scarce, people want to go get as much of it as they can before it runs out. They don't want to get screwed over by not having either when they run out. It is a rational response.
But in aggregate, the behavior of people in the cases propels the very crisis (scarcity of money or gas) further and further, becoming a self-fulfilling prophecy This would be irrational.
Is the only way to deal with these scenarios to have a reserve banking system to supply banks with money or strategic oil reserves?
Edit: In addition, spikes in demand will cause the price point to increase, further exacerbating the situation.
Gasoline and money starts becoming scarce, people want to go get as much of it as they can before it runs out. They don't want to get screwed over by not having either when they run out. It is a rational response.
But in aggregate, the behavior of people in the cases propels the very crisis (scarcity of money or gas) further and further, becoming a self-fulfilling prophecy This would be irrational.
Is the only way to deal with these scenarios to have a reserve banking system to supply banks with money or strategic oil reserves?
Edit: In addition, spikes in demand will cause the price point to increase, further exacerbating the situation.
This post was edited on 5/10/21 at 9:06 pm
9
Posted on 5/10/21 at 9:05 pm to UndercoverBryologist
quote:let's not forget the 2020 toilet paper run
Both 1970s style gas runs and 1929 style bank runs are examples of economic behavior that is rational on an individual basis but irrational in aggregate.
Posted on 5/10/21 at 9:05 pm to UndercoverBryologist
They needed cash back then. Today you just need your debit card to use anywhere.
Posted on 5/10/21 at 9:05 pm to UndercoverBryologist
Don’t worry Dementia Patient in Chief has it under control
Posted on 5/10/21 at 9:05 pm to UndercoverBryologist
You didn’t even address toilet paper Mr. Keynes
Posted on 5/10/21 at 9:06 pm to UndercoverBryologist
Posted on 5/10/21 at 9:07 pm to ForeverLSU02
quote:
let's not forget the 2020 toilet paper run
And the 2020 meat run. And the 2020 cleaning supplies run. And the 2020 hand sanitizer and mask run.
Posted on 5/10/21 at 9:08 pm to UndercoverBryologist
But if you hurry and get it, you’ll then have it.
Posted on 5/10/21 at 9:10 pm to LegendInMyMind
People are rational 10% of the time and irrational 90% of the time. But, according to them it's the other way.
We are fricked. I don't care what anyone says. Unless grace and a more prevalent faith in Almighty God come back in abundance we are due for a reset no one wants to experience.
We are fricked. I don't care what anyone says. Unless grace and a more prevalent faith in Almighty God come back in abundance we are due for a reset no one wants to experience.
Posted on 5/10/21 at 9:13 pm to UndercoverBryologist
If you have more than $250k in your bank account then you might should worry.
Posted on 5/10/21 at 9:36 pm to Jyrdis
With the way we saw economic hubs shut down on a dime with covid, I have no doubt the same would be done to banks if deemed necessary by those in power with full cooperation if not encouragement from the banks themselves.
Posted on 5/10/21 at 9:38 pm to UndercoverBryologist
quick...someone start a rumor on facebook that there is not enough physical cash to account for all the digital $s being spent.
Posted on 5/10/21 at 9:41 pm to Sooner5030
quote:
quick...someone start a rumor on facebook that there is not enough physical cash to account for all the digital $s being spent.
"Go to the bank and cash out your Dogecoin. The bank manager may call you an idiot, but you take it like a man. Just don't leave without your money!"
Posted on 5/10/21 at 9:44 pm to Sooner5030
quote:
quick...someone start a rumor on facebook that there is not enough physical cash to account for all the digital $s being spent.
Given the financial literacy of the crowd rushing from one hit new crypto to another they don’t understand, I could really see this being effective. It’s quite sad really.
Posted on 5/10/21 at 9:57 pm to UndercoverBryologist
To everyone that uses the term price point, please learn about price vs. price point.
Posted on 5/10/21 at 9:58 pm to ForeverLSU02
quote:runs are always bad
let's not forget the 2020 toilet paper run
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