No.
It cant do nothing to prevent the difficulties of a bank run while it is happening.
Things went wrong long before that.

My fear as well.  However, in the event things get even worse, I'd like to be as diversified as possible.  BTC is just another layer of diversification for me.  Fortuntely, a vast majority of my wealth isn't in BTC so if things getting better with the global economy is the worst case scenario for BTC, I guess I can deal with that.

@cypherdoc: Yes, I too was amazed to see the the USD and Treasuries soar while gold and silver plummeted during the '08 crisis but the next time around (as alluded to in the article) it would be the dollar itself that gets broken. It wouldn't be its' own "safe-haven".

I see how there could be demand for physical dollars but the reason there would be a demand is so that people could get out of them and convert them into a stronger currency. So what I see, in the scenario described in the article, is that the physical dollar would still drop against all other currencies (otherwise there wouldn't be a bank run in the first place) but the digital dollars would drop dramatically more in value.

A recent example is Argentina during the debt default of 2000. The peso lost 60% +/- against the dollar. There was still a huge demand for physical pesos but the banks simply closed while the value of the peso continued to drop. Physical cash virtually disappeared and people had to resort to barter if they didn't have US dollars or pesos to trade with.

So this time around the dollar wouldn't be the "safe haven", it would be what everyone is trying to get out of. Because of this I can see bitcoin and precious metals rising significantly as the new "barterable items of choice" since most Americans don't hold other currencies (at least in Argentina a lot of people held US dollars). But I could be missing something.

Yes, but the point is that they don't have that much physical cash on hand to meet the demand. Cranking up the printing presses requires some lead time. During that interim period banks would likely shut down and barter would be order of the day. But I could be wrong...

Can bitcoin fill the void in a bank run?

No. Next question? 

AHHHHH, don't lie to these people that FRN is not backed by anything. it is backed by none other than guns.

and a bank run would collapse if there was enough cash either way, if everyone had got their cash, there would be hyperinflation, and if people didn't get their money, you might even see some small scale revolution. I wish, but that is probably far from likely because most in the US are pussies, and i can say that because i am in the US.

Wait, I thought FDIC, or federal deposit insurance, that banks actually pay premiums into, is where the money to cover bank runs comes from, not newly printer dollars?

FDIC covers the consumer from loss, not the bank. however if there was ever a very serious problem the federal reserve will funnel cash directly into the banks, likely causing hyperinflation.

Zerohedge is the best econoblog on the Web, IMHO- certainly the most subversive. The blog owner uses a psudonym to promote free speech, the same way the authors of The Federalist Papers did.

Zerohedge is the Wikileaks of Wall Street.

The FDIC has almost no money. The banks that fail every Friday like clockwork have depleted the insurance fund completely. Sheila Bair is operating off of a 500 billion line of credit with Treasury, which will not be nearly enough to prevent a bank run should a TBTF go down.  Increasing that line of credit literally requires an act of congress, meaning it wouldn't happen in time to do any good. Besides, Treasury is Broke too.


Bank runs are always, always deflationary, but the big financial crisis may not be a bank run. It depends on how much liquidity the FED provides. Too much and the ship alters course from Japan to Zimbabwe.