Comments on: Fractional versus 100% Reserve Banking

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By: Dalton

Dalton — Wed, 16 Feb 2011 19:17:14 +0000

I don’t really see the fractional reserve banking’s argument that the “100 percenters” are infringing on their freedom to issue fiat paper money and subsequent fraud. The main difference is the fractional reserve bankers ARE issuing fiat paper money and subsequent fraud – nobody is preventing them from doing so. They are simply stating that it’s fraud and offering an alternative that they believe works better. So I don’t see how the two are evenly weighted by any means. One is actually happening…and one isn’t.

Fact of the matter is – private banks controlling national currency while charging interest doesn’t make any logical sense at all.

If x is the amount of printed paper money in circulation and y is the amount of interest (the interest isn’t printed though) – how can everybody collectively pay off x + y if they only collectively have just x???

Answer: It’s absolutely impossible.

By: Michael M

Michael M — Thu, 23 Dec 2010 09:49:40 +0000

And by the way, it is typical of sects (like Austrian economists or communists or 2nd century Christians) to have fierce arguments with those that are closest to them, with both sides quoting the scriptures (according to Rand, or Mises, or Trotsky of Lenin or Paul or Peter). Move into the real world, would be my advice.

By: Michael M

Michael M — Thu, 23 Dec 2010 09:44:33 +0000

My understanding is that a law case many many years ago in England it was established that when you deposit in a bank (not in the safe deposit boxes of course) you are LENDING to the bank. The bank owes you money, and like anyone who owes you money the bank may default. There is no fraud involved in owing someone money, as you noted. My point is the law is already in place. And I can’t see anything to stop you lending someone a certain weight in gold or tin or copper and signing a contract that says you are owed a certain weight of metal. Sounds similar to the futures market which already exists.

By: Crista Renouard

Crista Renouard — Wed, 22 Dec 2010 20:12:36 +0000

I don’t think there’s anything baring people from creating “savings only” houses; the problem is that it doesn’t make any sense. Savings only houses would necessarily charge fees for keeping that money safe (I mean, other than hiring security staff, how can one guarantee security?); People would, by default, keep all of their money with the place that might pay interest (or at least be free), leading to the same system that we have now. Doesn’t it? I mean, how else are loan companies supposed to get money to loan?