IMO all this would do is add to the upcoming deflationary value of the dollar / inflationary price action super cycle if it ever got any steam. Banks would have less reserve currency which is backed by the federal reserve. They would then have to tighten lending money (causing less ' money printing') causing deflationary pressure because they are still collecting loan payments and sitting on the rest of their reserve money (which is VERY low velocity --- meaning that this money does not really contribute to inflation because the rate at which this money circulates into the real economy is very slow). This would cause the fed to have to increase the lending reserve value for banks, but the banks would still not be lending money out to people in order to keep their reserve balances they need required by law. Now business cant get the financing they need in the debt based economy so they start to fail. Causing disruptions in the supply chain leading to more inflation in prices and decrease in wages. And since banks lending is what actually causes inflation since they aren't doing that any more they are causing dollar deflation. Basically this is inevitable but this would rapidly accelerate the rate at which this happens. TLDR: This would cause an inflation in CPI prices while simultaneously, causing deflationary pressure in dollar value (stronger dollar and lower asset prices like stocks and real estate). --- truly the worse case scenario in a debt based economy like America.