Startups learn the hard way how to manage cash after SVB’s collapse
ft.com
ft.com
Perhaps a better story would be, “Fiscally Responsible Startups learn the hard way that their work didn’t matter.” Because the market taught them that spending time considering their cash management was a waste of time. They should have just done what their peers did — act surprised and beg for immediate access to funds that are literally defined as ‘uninsured deposits.’
Just like catching a kid that’s about to fall off a fence, I sympathize with emotional toll that founders had to deal with during that long weekend. But it wasn’t the ‘hard way.’
If one thing should be as solid as a rock it should be our trust in our currency and if that can't be achieved then maybe we need to go back to the gold standard however ridiculous that maybe.
"...At the moment of deposit, the funds become the property of the depository bank. Thus, as a depositor, you are in essence a creditor of the bank..."
"Does The Money In Your Bank Account Really Belong To You?" - https://www.sgrlaw.com/does-the-money-in-your-bank-account-r...
Using gold as reference means that the value of everything else equals the amount of gold. Dig more gold out of the ground, and the amount of money increases, which sort of means that digging for gold creates value. Building a house without digging for gold does not create overall value in such a system, if you do that you're devaluating all the existing assets and transferring some value to you.
It's not a terribly attractive system IMNSHO. Central banks tried to make it more attractive by trying to fix prices instead of the tying the total value of the economy to gold, turning it into a notionally gold-backed system.
It's also not a relevant difference; as you can imagine, introducing gold-backed currency doesn't turn uninsured depots into insured deposits.