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[quote user="meambobbo"] Yall need to cut Histhasthai and Driftwood some slack. They are essentially correct. [/quote] They are ethically correct. But there is a hugely important point about why fractional-reserve banking is praxeologically impossible on a sustained basis absent fraud or coercion...
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[quote user="PeterWellington"] [quote user="hjmaiere"]But if PFRBNs are not fradulent, then they are not a promise to deliver gold. They are merely a claim on the assets of a bank (i.e. its outstanding loans and investments). This is not a promise to deliver gold. A bank may offer...
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[quote user="PeterWellington"] [...] If you look back on my posts, I've consistently said that these types of notes would not function as gold itself (or whatever), but merely as a promise to deliver gold. I think our only real disagreement is what value these promissory notes would have...
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[quote user="PeterWellington"] hjmaiere, I agree with most of what you wrote about money, but I don't agree that FBR under a free market is absurd. I think we already see several similar practices in our market today that were not brought about by government (as DriftWood and I have mentioned...
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[quote user="PeterWellington"] hjmaiere, Arguing that the practice of FRB is evil because it has been mis-used is like arguing guns are evil because they have been mis-used. [...] [/quote] As I've tried to point out several times, the argument is not that FRB is evil and should be outlawed...
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[quote user="PeterWellington"] It seems as though there are two main issues being debated: 1. Is FRB inherently fraudful? 2. Would FRB exist in a free market? If a bank fully discloses their practices and lives up to them (as in histhasthai's example), how can this be considered fraud?...
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[quote user="DriftWood"] Yes, its the govt intervention that is bad, not the private free market fractional reserve banks. Banks have no effect on prices, as banks only lend money from one person to another. No money is created, only debt is created. And thats not money. People dont need banks...
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[quote user="fsk"] [quote user="hjmaiere"]And in 1929, when people called the banks on the fact that there were twice as many bank notes in circulation as there was gold on deposit, the government's response was to outlaw gold:[/quote] The gold confiscation and default on the...
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[quote user="DriftWood"] [...] Banks exist to connect borrowers and lenders. Its the middle man, so that borrower dont have to go looking for lenders and vice versa. [/quote] Banks can and have done exactly this without fractional reserves. And back when they did this without fractional reserves...
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[quote user="histhasthai"] [...] [quote user="hjmaiere"]The simple historical fact is that without government intervention, people simply didn't treat that piece of paper as if it were money, including the issuing bank itself.[/quote] I'm not prepared to argue historical banking...