If the government did not step in to insure bank deposits then all deposits above 250,000 are essentially eliminated. Meaning the depositors lost money and no one gained any money on the other side. Bankruptcy is another example of it not being zero sum. It supposed to be zero sum, but market dysfunction creates scenarios where that isn’t always the case.
cbryantm t1_jdyh32w wrote
Reply to comment by moonguh in Dalio talks again about the Silicon Valley banking crisis: the world is leveraged to invest and everyone loses money by Evreya
If the government did not step in to insure bank deposits then all deposits above 250,000 are essentially eliminated. Meaning the depositors lost money and no one gained any money on the other side. Bankruptcy is another example of it not being zero sum. It supposed to be zero sum, but market dysfunction creates scenarios where that isn’t always the case.