Under 100% reserve banking, you would have the options of:
and/or
In a 100% reserve bank there are no loans. If your money is being loaned it is not in reserve. If your money is being loaned out then the loan contract would stipulate when your funds could be redeemed. If the bank can’t meet the redemption demand per the contract then it is insolvent.
Well it would not be a free market if peopel could not make banking arrangements according to their own choosing. There is no inherent fraud in having less than 100% reserve of deposited funds. The only fraud occurs if the bank misrepresents how the money is being used. There is no requirement that a check be a demand instrument. Most banks frequently put holds on checks which they do not do with cash.
This is up to the bank to determine it’s fees not up to you to dictate. Again, in a free society, which obviously you are not interested, in these things would be decided in the market and your scenario would only be one of many possible.
Quite possible, and also quite possible that banks will allow customers to write checks on these above types of accounts with the same constraints, bringing is back to essentially in many respects to where we are now.
Typical Austrian dictator nonsense. I have a bank that is 100% reserve, I charge fees, I use some of my profits to pay interest on the accounts, once again I have defeated the Austrian impossible.
Why is the bank forbidden to have less than 100% reserve, is this not an issue to be resolved between the bank and the customer? If everyone is in agreement on the risks involved and there is no misrepresentation then people should be free to make their own financial arrangements based on their own risk preference.
While perhaps a scam, here is an example: http://www.freelakotabank.com/
Only, that’s not interest. So, no, you haven’t.
The way I see it you’re just a troll, so stop throwing around silly terms such as “Austrian dictator nonsense”. You’re not even defending FRB, you’re defending some type of loan banking that doesn’t make any sense and would become insolvent rather quickly.
A working example of a scam? [^o)]
Maybe you don’t understand what the term interest is? If a customer puts money in bank and the bank pays him interest, then that is interest. Where the funds come from to pay interest is unimportant. I realize that reality is huge splash of cold water to the Austrian cult.
What I am defending is freedom in a free society not the Austrian dictatorship you want.
Oh my. Maybe we should call you Charles…Ponzi ?
I guess you dont understand what the word interest is either. We were discussing using profits generated from fees in a 100% bank to pay interest. I am not required to loan out money in order to pay interest. Paying interest could very easily be a marketing effort to attract more customers. Either way it is still interest.
No, interest is the payment require to compensate the actor for his giving up consumption. Learn economics.
Well, be polite about it.
…By definition a loan is…never mind.
So, you think that your calling an apple an orange means that people who use the term apple correcly are in reality using it incorrectly.
I guess the MaxLiberty non-dictatorship free-society includes the redefinition of ordinary terms. Sounds familiar…
Why charge fees if you are paying ‘interest’ on unloaned money? (I always thought interest was the expense/income of borrowing/lending capital?) Why not just lower your fees? If you had no fees and actually payed customers to store unloaned money for them, that would be very generous of you, but you’d be broke in a heartbeat unless you limited your customer base to what you could afford.
[8-)]
It’s interesting that you have such contempt for Austrian Economics yet you have an account on this forum and have about 750 posts. Have you been trash talking for all 750 of those? lol You must be annoying the shit out of the people here.
But you know, I think its good that you’re here because it’s important to hear another competing view. Talking mainly with people who agree with you is certainly not always good for you. But maybe you could cut the attitude and quit accusing people of not wanting freedom and supporting an “Austrian dictatorship.” You sound like an uptight little bitchy boy.
I think I can speak for all of the users here when I say that we all support letting the free market decide how to arrange and setup society. However, for the same reason why a Republic form of government protects the individual from murderers, rapists and thieves - fractional reserve banking must also be put to an end because it is, in the humble Austrian opinion, fraudulent. It is also inflationary by nature and devalues the currency over time. A bank practicing fractional reserve banking is always bankrupt - it just has yet to be realized.
You wouldn’t let a murderer kill people in the name of freedom would you? No, you wouldn’t. That is what the Republic is for - to protect the freedom of individuals from such horrid acts. For the same reason a fractional reserve bank would not be allowed to come about on the free market - because it is fraudulent, inflationary and plays a very large roll in creating the business cycle.
So - Austrians believe that the free market has full reign to setup society as freedom and individuals see fit, just so long as it involves sound money and banking. The fractional reserve system provides neither.
Below is the most likely scenario that would play out on the free market once the fraudulent embezzlement of fractional reserve banking has stopped. You are splitting hairs and being a little brat to say that this is how we would “dictate” it to be. That is not what we are saying. Rather, this appears to be the most likely result.
Under 100% reserve banking, you would have the options of:
and/or
Any other stipulations or questions, Maxliberty?
Let’s try to keep this civil, and this applies to both yourself and MaxLiberty.
Absolutely, the free market is predicated upon property rights, every infringement upon those rights is an instance of an individual acting in a state like manner. So in this regard MaxLiberty is standing in his glass house and throwing stones at a good deal many people, especially so when you consider that historically there has always been associated with supporting the infringement of property rights in the form of FRB. In fact, so much so that it decided to create a lender of last resort. I wonder, if MaxLiberty’s system is so solvent, why is it that it needed government intervention?
Sure thing. It can be hard sometimes. haha
It’s only fractionally reserved if you can still access it after it has been loaned out. Time Deposits are considered in 100% reserve if you cannot acces money beyond what is stored in your account at the bank.
No, you’ve merely substituted the word “rebate” with “interest”.
This is where you are wrong and why your Austrian cult theory is mistaken. There is no requirement that the bank offer demand deposits. Instead what is most likely is that the bank will have a mix of assets backing 100% of its deposits. Some of these might be long term illiquid assets and some be very liquid assets in order to satisfy physical redemption. This gives this type of bank enormous advantages over your 100% on demand reserve bank. These other illiquid assets may be in fact be financial assets that are earning a profit for the bank thus allowing the bank to subsidize things like free checking or interest on its own 100% demand deposit part of the bank.
This is why the Austrian about what is most likely or what most of you say, the only permissable forms of banking, is completely wrong. What I have described above is not inherently fraudulent and allows for a variety of different banks based on a variety of possible risk preferences of the depositors.
For the record, I call the Austrians cultists on this issue because they never argue the facts only repeat the mantra. Secondly, I refer to them as dictators because if you accuse me of practicing fraud with the presumtion of incarceration or punishment when in fact I am not committing fraud then you are acting as they very thing you claim to be against.
The only that can be delcared fraud is maintaining a fractional reserve of something you claim is 100% on demand. I can have a fractional demand reserve and the other portion of the deposits backed by non demand assets as long as the depositor knows the arrangement. This is essentially nothing more than limiting redemptions based on agreed upon terms. This is far more likely than a bank that has 100% on demand reserves. In fact this bank will drive the exclusive 100% on demand reserve banks out of business.
The issue is really only redemption. In a 100% demand reserve bank, there are no loans. If I have a bank that maintains 100% reserve of its deposits but some of the assets are not instantly redeemable then any notes the bank issues may not be redeemable on demand for a particular asset that the bank is using as assets to back its deposits. There is no logical reason a bank should be required to offer on demand redemption of it’ s notes.