When people say "the banks are out of money," they usually mean one of two things. One is wrong, but the other is terrifyingly correct.

Here is the translation of "The Banks Are Out of Money" into the technical reality we just covered.

1. The Wrong Take: "Cashless"

If he means banks physically have zero dollars in the vault, he is wrong. Because of Basel III (the hoarding rule), banks actually have more raw cash sitting at the Fed than almost ever before. They are swimming in liquidity, but they are refusing to lend it (because of the SLR rule).

Analogy: The bank is like a dragon sitting on a pile of gold. The gold is there, but the dragon won't let anyone touch it. The villagers (the economy) scream "There is no money!" not because it doesn't exist, but because it isn't moving.

2. The "Based" Take: Mark-to-Market Insolvency

This is likely what he (or the doom-sphere) means, and it is the real danger.

Remember the TIPS bond logic? When rates rise, bond prices fall.

The Trap: Banks bought trillions of dollars of Treasury bonds back in 2020-2021 when rates were 0.5%.

The Reality: Now that rates are ~4.5%, those bonds are worth 30-40% less on the open market.

The "Out of Money" Math: If you forced every major US bank to sell all their assets today at current market prices ("Mark to Market"), many of them would technically be insolvent. Their liabilities (your deposits) would be greater than the cash they could raise by selling their assets.

Why haven't they collapsed yet? Because of a magical accounting rule called "Hold to Maturity" (HTM).

Regulators let banks say: "We don't plan to sell these bonds, so we don't have to report the loss. We will just pretend they are still worth 100 cents on the dollar."

Translation: They are "technically" out of money, but the referee is letting them fake the score as long as nobody asks for their cash all at once.

3. The Verdict on "Juan Eighty"

He is right in spirit but imprecise in language.

Correction: The banks aren't "out of money" (liquidity). They are "out of equity" (solvency) if you strip away the accounting tricks.

The Trigger: As long as depositors don't panic, the lie holds. If depositors panic (a run), the bank has to sell those bonds, the "paper loss" becomes a "real loss," and the bank dies instantly (see: Silicon Valley Bank).

Would you like me to explain "Bail-In" vs. "Bail-Out"? This is usually the next topic in these threads—it’s the mechanism where they take your deposits to save the bank instead of printing new money.

(http://www.autoadmit.com/thread.php?thread_id=5808227&forum_id=2\u0026show=posted#49495847)