2006-12-05 05:34:56 · 6 answers · asked by Anonymous in Social Science ➔ Economics
Half of the world would collapse. The US needs 3rd world debt to define its assets.
Now if 3rd world countries were to renege on their debt, that would have the opposite effect.
2006-12-05 05:40:24 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Actually, banks don't 'own' any money so to speak. so really, they just take money from people who want to keep it safe (creditors) and lend some of it, to those who needs loans (debtors).
Suddent withdrawal of all money from a bank would destory it, along with savings of many people. This was a frequent occurence all over the world when banking was in its infancy. To prevent this, national banks or banks of last resort were established to lend the necessary money to bank if that's necessary. So, in the US Fed serves this role, and would provide the amount needed to pay off all of banks debtors.
2006-12-05 15:26:52 · answer #2 · answered by Yura 2 · 0⤊ 0⤋
They won't. However, to ponder.......
Ever see 'It's a Wonderful Life' with the scene where they had a run on the bank.
In case you do not know, banks do not keep our money in their vault, in fact they keep very little. Banks take our deposits and loan then out 20 times over. That's one way they make tons of money.
They don't keep the money on hand. Did you know that if you want to take $5000 out of your savings account, they can tell you that you need to give them up to 7 days notice -- it's in your contract!!
And if all lenders called their loans, there would be bank runs, defaults, bankruptcies, court snarles etc. It just wouldn't happen.
2006-12-05 13:54:30 · answer #3 · answered by Tiberius 4 · 0⤊ 0⤋
That's a nonsensical question. Loans are contracts made between the lender and borrower, with defined loan periods and payment terms. A lender can't just arbitrarily "call back" a loan all of a sudden -- that "demand" would be completely unenforceable and would be ignored by everyone, and would only serve to ensure the lender would go out of business as no one would ever borrow from them again.
2006-12-05 23:18:49 · answer #4 · answered by KevinStud99 6 · 0⤊ 0⤋
The courts would tell them that they can't do it, since the majority of lending agreements do not have a call clause.
2006-12-05 15:56:10 · answer #5 · answered by NC 7 · 0⤊ 0⤋
I doubt they would be successful in the first instance and in the second, the nation would be crippled literally.
2006-12-05 13:39:29 · answer #6 · answered by SANCHA 5 · 0⤊ 0⤋