IfI think soberly about how fragile the fiat system is right now, it scares the hell out of me. Here’s my thoughts:

With no reserve requirement, banks camn operate on a razor-thin cushion to be able to handle losses and operational mishaps. Lets say they have 7% of capital.

In the past few years, the US dollar index went from below 100 to over 110, then back down to around 104. That is what measures the dollar vs the euro and 6 other major currencies. That’s their unit of account and medium of exchange whilst operating on such thin reserves. And that’s not even considering all the other risks they take.

It’s like trying fo build a house using a broken measuring tape. The game is rigged in their favor, but every once in a while someone still screws up.