I must admit that I've never understood the clain that two individuals claim the same property under fractional-reserve banking. Will someone explain this to me? One is the debtor, right?
Knight_of_BAAWA:Which is like encouraging people to spend so that there won't be a recession.
GilesStratton:Only, I'm not encouraging people to consume more as a means to make society more prosperous. My argument is that all money not spent represents goods that can be used and is therefore money with which loans can be made.
nirgrahamUK: ok. i thought you were familiar with the relationship that obtains between real savings and investment. Did I assume too much? perhaps you haven't noticed that you wish to explicitly include what you perceive to be as non-savings as permitting investment. Need I remind you that any Human Action represents goods foregone, so why are you whining about money as a special case?. you say
ok. i thought you were familiar with the relationship that obtains between real savings and investment. Did I assume too much? perhaps you haven't noticed that you wish to explicitly include what you perceive to be as non-savings as permitting investment.
Need I remind you that any Human Action represents goods foregone, so why are you whining about money as a special case?. you say
I don't know what point you think you're making, but you're missing the bigger issue. That, whenever one doesn't spend money, goods are being foregone. Now, one cannot see the goods being foregone by the act of not spending (whether it be not spending in order to increase cash balances or to increase future consumption), one can however see the money that is "saved". I'm not "whining about money as a special case", I'm saying that by not spending money one gives up the ability to buy goods, goods that can be used for investment purposes.
nirgrahamUK:I might as well say that my problem with 100% private property rights is that in reality private luxury goods in peoples homes (Tv's, Bed's etc) do represent goods that are foregone, in spite of this, these goods cannot be used in investment by entrepreneurs. are you reductio'd sufficiently?
I don't think you understand what the loan market is. In the loan market it is time that is being exchanged, with money serving as the medium of exchange between future and present. Goods such as those you named are all specific goods, whereas money grants one access to a host of goods (by definition). You're also begging the question and shifting the goal posts. You're commiting the former by assuming that fractional reserve banking does indeed violate property rights, and the latter by turning this debate into one about the nature of property rights instead of a debate about the economic efficiency of FRB.
nirgrahamUK:no, no. the structure of production will be shorter than what? shorter than if there was an artificial credit boom that favours mal-investment. you are coming out like a newb that fetishes *economic growth statistics* and is favour of madcap government schemes to lengthen the structure of production...
The structure of production will be shorter than it would be if consumer desires were allowed to assert themselves, in other words, the price of time on the loan market will not reflect the time preferences of individuals, defined as the intertemporal spread of society's resources between the stages of production. It really isn't difficult, and where you're getting my fetish of "economic growth statistics" from, I'll never know.
Also, nobody has invoked government, so I don't see why you are. Please, construct an argument that is not replete with strawmen and other fallacies.
nirgrahamUK:a monetary system that presents to entrepreneurs false information about the populations time preference will lead to mal-investment.
And this is exactly what I'm saying, my point is that unless the supply side of loanable funds is sufficiently elastic wrt the demand for loanable funds the market rate of interest will be a "false signal" and will thus cause malinvestment (and underinvestment).
nirgrahamUK: but perhaps you think FRB is as compatible with free markets as involuntary socialism is. You have all the work to do in proving that in a free market ,praxeological absurdities would thrive; and institutions which mitigate against fraud are necessarily 'artificial'
Well, let's see, as far as I'm concerned FRB is a voluntary contract like any other. Now, if you wish to prohibit voluntary fractional reserve banking, the burden of proof is on you, you'd do well to stop shifting it.
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
Knight_of_BAAWA:....which means that society is less well-off because the money isn't being used.
No, which means that society is worse off because the goods that the money represents, are not being used.
GilesStratton:No, which means that society is worse off because the goods that the money represents, are not being used.
Without savings, we can't have investment later. You should know this. The money represents a long-term view.
KoB, until prices adjust to the new demand for money, the increase in cash balances will mean that there are goods being foregone that are simply not being used. Now, my argument is that whilst in the long run you may be correct, in the short run, the downward adjustment of prices will cause relative price distortions and malinvestment.
GilesStratton:KoB, until prices adjust to the new demand for money, the increase in cash balances will mean that there are goods being foregone that are simply not being used.
GilesStratton:Now, my argument is that whilst in the long run you may be correct, in the short run, the downward adjustment of prices will cause relative price distortions and malinvestment.
GilesStratton:I don't know what point you think you're making, but you're missing the bigger issue. That, whenever one doesn't spend money, goods are being foregone. Now, one cannot see the goods being foregone by the act of not spending (whether it be not spending in order to increase cash balances or to increase future consumption), one can however see the money that is "saved". I'm not "whining about money as a special case", I'm saying that by not spending money one gives up the ability to buy goods, goods that can be used for investment purposes.
Saving is the sacrifice ofpresent goods (a claim on present goods is temporarily foregone) for a claim on futuregoods. Since the holding of cash balances, whether in the form of deposits or currency,does not require the sacrifice of present utility, changes in cash balances financed fromcurrent income are not a part of saving, but represent part of the allocation of incometo provide present utility.6
lets have some praxeology please. I thought you were familiar with Mises and Hoppe. and Soto
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
By holding money you forego the present utility of the goods you could have bought in exchange for the ability to buy goods in the future. So yes, saving.
dead wrong. by holding cash, and having it available, you have not foregone present utility. rather the opposite. want to know what foregoing the utility looks like? it looks like making an investment. i.e. you take the money out of your wharehouse and give it to an entrepeneur. only then do you forego the present utility of your hoard. you certainly dont forego its present utility, when you have it.
"by holding cash, and having it available, you have not foregone present utility. rather the opposite."
if as soon as you had cash you exchanged it for goods...well that would seem like forgoing present utility....but holding large amounts of cash could mean forgoing present utility for a very quick (liquid) exchangs(s) in the future without the process of asset liquidation to get cash in order to get something else.
so holding money and not holding money are foregoing present utility? you guys are impossible to talk with.
when you have cash, you have the present utility of the cash. that simple.
nirgrahamUK:lets have some praxeology please. I thought you were familiar with Mises and Hoppe. and Soto
I'm not talking about utility, I'm talking about the real goods that are foregone by an act of increasing cash balances. Now, if you'll do me the favour, give me a more adequate response that "you haven't internalized Hoppe sufficiently!"
"....the clain that two individuals claim the same property under fractional-reserve banking."
i have read at mises.org and lrc of some saying the this is a square cirlce issue. i dont know if they are lying or not.
does a bank have 10 percent of a deposit held in a physical money form?
is 90 percent of a deposit (a cash deposit?) lent out to someone and once that takes place does that bank then 'create' dollar-credit to into the deposit 'account' of the depositor?
if the depositor is spending the created dollar-credit ( more than the 10 percent cash in account) from the bank are they actually spending 'the cash' that was loaned out from their deposit?
if i understand it correctly, it doesnt seem that they are.
but it seems that the loan check receiver spends money but depositor spends a 'promise of repayment' of that money in the same way called the same thing..."dollars in an account"
i guess the person accepting dollars (under current banking regime) other than 'cash money dollars' or the money order hopefully knows they are receiving credit-dollar and not a dollar of money.
to me it seems that bank account dollar-credit (again, if this is at all true) is not a property conflict.
unless in some grand way the bank is able to secure goods (property) by way of 'promises of goods' where others must use 'the goods' but that i am not sure about.
i am trying to figure out what other conflicts there are though.
it would be more equitable if everyone could just make their own credit dollars i guess .
+ does the plus sign meet some definitions of a 'square circle'?
Knight_of_BAAWA:No, it won't. Lending out that which you don't actually have the ability to cover for leads to price distortions and malinvestment. That's ABCT.
You cannot lend out what you do not have.
February 17 - 1600 - Giordano Bruno is burnt alive by the catholic church. Aquinas : "much more reason is there for heretics, as soon as they are convicted of heresy, to be not only excommunicated but even put to death."
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