I asked this question in one thread and I don't think it was ever answered.
So I'm going to ask it again. For all the complaints about fractional reserve banking and how it lends out from checking accounts and savings accounts, I have to ask how is this not implicit in the contract when there is already a "warehouse" type system in place for people - safety deposit boxes. Is their a gold-bug argument against this?
For more, I'd consult the podcast at FEE by Jeffrey Rogers Hummel.
existence is elsewhere
wilderness: Wilmot of Rochester: All good questions that I don't know the answer too. I think that most people choose to use a bank out of convenience and social norm. If we were to suggest, however, that it was out of convenience that people use banks, wouldn't it be safe to say that in a free-market people would probably still use a fractional reserve bank more than a "warehouse" just because it's more convenient to be paid to stash your money in a bank that will re-lend it out than it is to pay to stash your money in a warehouse that will pretty much just sit there when you could have invested in a nice safe instead? I know that's why my father decided to just by safes instead of getting a deposit box. That's why I never liked a savings or check deposit cause I always thought what's the point. The interest alone creeps in the pennies and the money never stayed in long enough when I was 16 when I first had one, so, I withdrew the money and never had one again til I was married only because to pay bills is easier when the money is in the bank since it's safer to send checks rather than cash through the mail. So it is a matter of convenience. I used to think the same thing, why not have a safe instead. So being paid to stash money in a bank doesn't happen in significant terms. Unless in CD's or something more than a savings or checking account, and CD's are not on-demand so that seems to be a tangent. I think a significant point of FRB is the dishonesty. Nobody really knows their money isn't there (meaning all customers of the bank). They expect to get their money on demand. Thus why when the confidence in any bank decreases people worry and runs may ensue. And since this U.S. economy is deeply based on fiat, why so much infrastructure (the actual buildings of the Federal Reserve, FDIC, etc...; all costing money) and other market structures (FDIC, etc...) are in place as huge overhead to try to fill the big fiat hole.
Wilmot of Rochester: All good questions that I don't know the answer too. I think that most people choose to use a bank out of convenience and social norm. If we were to suggest, however, that it was out of convenience that people use banks, wouldn't it be safe to say that in a free-market people would probably still use a fractional reserve bank more than a "warehouse" just because it's more convenient to be paid to stash your money in a bank that will re-lend it out than it is to pay to stash your money in a warehouse that will pretty much just sit there when you could have invested in a nice safe instead? I know that's why my father decided to just by safes instead of getting a deposit box.
All good questions that I don't know the answer too. I think that most people choose to use a bank out of convenience and social norm. If we were to suggest, however, that it was out of convenience that people use banks, wouldn't it be safe to say that in a free-market people would probably still use a fractional reserve bank more than a "warehouse" just because it's more convenient to be paid to stash your money in a bank that will re-lend it out than it is to pay to stash your money in a warehouse that will pretty much just sit there when you could have invested in a nice safe instead?
I know that's why my father decided to just by safes instead of getting a deposit box.
That's why I never liked a savings or check deposit cause I always thought what's the point. The interest alone creeps in the pennies and the money never stayed in long enough when I was 16 when I first had one, so, I withdrew the money and never had one again til I was married only because to pay bills is easier when the money is in the bank since it's safer to send checks rather than cash through the mail. So it is a matter of convenience. I used to think the same thing, why not have a safe instead.
So being paid to stash money in a bank doesn't happen in significant terms. Unless in CD's or something more than a savings or checking account, and CD's are not on-demand so that seems to be a tangent.
I think a significant point of FRB is the dishonesty. Nobody really knows their money isn't there (meaning all customers of the bank). They expect to get their money on demand. Thus why when the confidence in any bank decreases people worry and runs may ensue. And since this U.S. economy is deeply based on fiat, why so much infrastructure (the actual buildings of the Federal Reserve, FDIC, etc...; all costing money) and other market structures (FDIC, etc...) are in place as huge overhead to try to fill the big fiat hole.
I don't know about whether people don't know it or not. I wonder if there are any studies out there about that.
Wilmot of Rochester:First, I'm not going to acknowledge the flaming.
Wilmot of Rochester:Second, but why do they have that one use?
Wilmot of Rochester:Why, if people were so concerned with it, wouldn't people use a tool to ensure that their money wasn't re-lent out?
Wilmot of Rochester: I don't know about whether people don't know it or not. I wonder if there are any studies out there about that.
People don't know what? I know everybody I've ever talked to even my extended family, about the Federal Reserve in general left alone how banks use our money for loans, I get looks like, "What the hell are you talking about?" And then after they look at me like that, they say that. Though admittedly I've made great strides all the way up to my grandmother to listen me, on occasion, rattle on about the Federal Reserve and how this government is a fraud.
"I used to see a mountain as a mountain.. Thereafter.. when I saw a mountain; lo! it was not a mountain.. yet now of final tranquillity: I see a mountain just as a mountain as I used to.." - Master Yuan; molon labe
wilderness: Wilmot of Rochester: I don't know about whether people don't know it or not. I wonder if there are any studies out there about that. People don't know what? I know everybody I've ever talked to even my extended family, about the Federal Reserve in general left alone how banks use our money for loans, I get looks like, "What the hell are you talking about?" And then after they look at me like that, they say that. Though admittedly I've made great strides all the way up to my grandmother to listen me, on occasion, rattle on about the Federal Reserve and how this government is a fraud.
Yes. It might be true that no one knows, but I'm curious as to the percentages. My parents knew it, but it probably has to due with my grandfather having worked in a bank.
Knight_of_BAAWA: If a woman is concerned about rape, why would she wear a miniskirt?
If a woman is concerned about rape, why would she wear a miniskirt?
I hope you realize that has nothing to do with the topic and my question is no where near "blaming the victim." It's a question that I think is answered simply with this statement,
Fractional reserve banks are more effective and efficient at providing customers with their desires on a whole than are gold warehouse-banks.
for those who wish to deal mostly in physical cash a safe deposit box as one of many storage places of wads of cash (and other items) is probobly a good place to keep some of it in case of disaster, fire theft, etc.
as far as demand goes a public storage facitly with a safe in side might privde more round the clock access if necessary - but ther emay be 24/7 secure safe deposit boxes that i am unaware of.
Wilmot of Rochester:I hope you realize that has nothing to do with the topic and my question is no where near "blaming the victim."
Wilmot of Rochester:It's a question that I think is answered simply with this statement, Fractional reserve banks are more effective and efficient at providing customers with their desires on a whole than are gold warehouse-banks.
Knight_of_BAAWA:So we just throw morality out the window in the name of....what, exactly.
Don't force your personal morality on others, man!
Knight_of_BAAWA: Wilmot of Rochester:I hope you realize that has nothing to do with the topic and my question is no where near "blaming the victim." But it has everything to do with your topic, especially since you are blaming the victim. Wilmot of Rochester:It's a question that I think is answered simply with this statement, Fractional reserve banks are more effective and efficient at providing customers with their desires on a whole than are gold warehouse-banks.So we just throw morality out the window in the name of....what, exactly.
Well... Considering I don't see people using banks as victims... No, it has nothing to do with victims.
You throw your personal morality out the window? No, no. This is the point. You have an option. You don't have to use banks. You can store your cash in a safe, a safety deposit box, whatever you like. Others will take the relatively low risk involved in putting their money in a bank and enjoy all of its features.
Everyone wins.
Wilmot of Rochester:Well... Considering I don't see people using banks as victims...
Wilmot of Rochester:You throw your personal morality out the window?
And a woman doesn't have to be raped. All she has to do is not wear a miniskirt, right? IOW: why should the depositors have to bend to the wishes of those who would debase their deposits? Stop. Blaming. The. Victim.
Knight_of_BAAWA: Wilmot of Rochester:Well... Considering I don't see people using banks as victims...It's the other way 'round. The depositors are the victims. Wilmot of Rochester:You throw your personal morality out the window?That's what you're advocating. In the name of...supposed efficiency, it looks like. And a woman doesn't have to be raped. All she has to do is not wear a miniskirt, right? IOW: why should the depositors have to bend to the wishes of those who would debase their deposits? Stop. Blaming. The. Victim.
They. Are. Not. Victims.
They bend to no wishes, they enter a contract, which I would have assumed you'd respect, and then receive an efficient and effective system of banking in return - for the most part.
How awful it is to be a middle class American with a checking account?
consumers dont have a choice between checking accounts that are bailments and those that are explicit loans to banks. this is by law.
its like asking why people will go to the movies under conditions where there is a national monopoly on cinema theatres and the state has mandated a price of receiving a punch from the ticket office clerk in addition to a standard admission tariff. obviously a disincentive to go watch a film.obviously unjust. and yet people might desire the experience of the thrills of cinema even in the face of suffering some injustice to partake. and you will say, "well they could have done without the cinema experience..."
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
Wilmot of Rochester:They. Are. Not. Victims.
Wilmot of Rochester:They bend to no wishes, they enter a contract
You really need to work on your thought-processes.
Knight_of_BAAWA: Yes, they are. They are expecting to have the full amount of their cash in reserve at the bank, rather than the bank inflating the currency and devaluing their money.
Yes, they are. They are expecting to have the full amount of their cash in reserve at the bank, rather than the bank inflating the currency and devaluing their money.
How do you know that for every person or even for one person? How do you know they didn't sign the contract saying that this was the situation? How do you know that their currency is directy devalued if the banks lending abilities allow for greater production, off-setting your concept of inflation? (Please, answer these head on without resorting to attacks or red herrings).
I suspect most people know of bank runs and are familiar with the FDIC and don't believe it's there just in case their bank gets randomly robbed. So whereas you suggest people don't know their money is lent out efficiently and practically by banks, I suspect most people do have that in mind. Third, if they don't like it they are not forced to use it. It's a simple fix. The reality is, however, they do like it. They, unlike a victim, receive significant benefits from their banks. They, unlike a victim, seek out banks. They, unlike a victim, have the opportunity to pull out without any fight from their banks.
Why? Because fractional reserve banking works! I think the gold-bugs need to deal with that.
nirgrahamUK: consumers dont have a choice between checking accounts that are bailments and those that are explicit loans to banks. this is by law. its like asking why people will go to the movies under conditions where there is a national monopoly on cinema theatres and the state has mandated a price of receiving a punch from the ticket office clerk in addition to a standard admission tariff. obviously a disincentive to go watch a film.obviously unjust. and yet people might desire the experience of the thrills of cinema even in the face of suffering some injustice to partake. and you will say, "well they could have done without the cinema experience..."
You're talking about two different things.
There isn't a legal monopoly on the storage of money. You can store it yourself, if you like. You could probably get a storage shed and store it in there if you're also so inclined. There are many different ways you can store your money without having the cops kick down your door.
You cannot, however, legally host a movie for friends and family while charging them a price for viewing said movie.
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