Debates about bailouts continue; but, the essential debate happens in people’s wallets and purses. If the banks close and all your money was digital, what do you have? Maybe it is all fine, but when insecurity threatens, people want tangible value – hence, massive ATM cash withdrawals that emptied the machines in Greece. Greece is not alone. Most countries do not print as much cash as the value of the money supply. In the US there’s $1.3T printed, but a value of $11.9T realized. If everyone asked for everything in cash at the same time, the demand can’t be met. Because the US Dollar is effectively an international currency, at least half of those dollar bills are outside US borders. It may be unrealistic to have a printed bill for each dollar value in the modern world, but the scarcer the currency, the quicker the run on the bank potentially.
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