Typical Austrian cult nonsense. Nowhere have I mentioned government intervention, I have only discussed what would and should be allowed to occur in a free market.
I personally have no problem with you being allowed to put your crackpot theories at work in a free market. Just like I wouldn’t stop quacks from trying to cheat gullible people.
Read what I said again and realise why you missed the point.
In a sound money system, it matters not where the money is stored because an ounce of plutonium today is worth an ounce of plutonium ten or twenty years later. I don’t like to keep my plutonium under my mattress since I live in a bad neighborhood and can’t guard it properly 24/7 (am also tired of concieving four legged children) so I pay a bank to use their highly secure and lead lined vault for safe storage.
When I was younger I’d invest about 50% of my sound money in schemes that while risky, ussually paid decent returns (except for that one at three mile island … grrr) Now since I only have perhaps less than twenty years to live, I am much more conservative and keep about 80% in the vault. My father, while a happy and radiant old man, is ravaged with cancer and could pass at any time, he keeps all of what money he has left under his mattress.
Max L - what is most likely is that banks would offer a choice to their customers. I doubt many customers would be anxious to see their prized kilo of plutonium converted into ten tons of silicon upon redemption.
That is the entire point. I have no idea what you are saying with the rest of your post.
Why don’ t you read your post and then show me where I said that the government needed to intervene in “my” system?
The issue is that you claim what I propose is inherent fraud. Presumably fraud would be a criminal offense even in a free society. I have consistently demonstrated your claim of fraud is inaccurate as well as made a convincing case that this banking would in fact be the majority of banking conducted.
Good thing I never claimed anything of the sort then, because then I would have been wrong.
What I was trying to say, albeit in a roundabout and humorous fashion, is that the system you are proposing would be generally uncompetitive under a sound money system. Because of the vast variety of monies and ever changing price relationships between them, you would not be able to guarantee 100% reserve upon demand withdrawals for what was deposited.
100% reserve means 100% of redeemable assets are in reserve. The fraction loaned out from a time deposit has a precondition that it is not redeemable. That’s the definition of a time deposit. So loans can very well happen in a 100% reserve bank.
What you propose is nonsense though apparentely it’s not the same kind of nonsense other advocates of frb propose. Your version of frb seems to be less fraudulent, but it doesn’t make economic sense anyway.
At the same time you seem to believe that your system is no different than the current state-privileged, bankrupt system we suffer today, so maybe you are advocating outright fraud - or you don’t understand the current system. Given your redefinition of terms and overall confused position, it’s hard to tell.
Anyway, the thing is, in a free society, your system wouldn’t last a month, so I don’t see what’s the point of outlawing it.
Perhaps - perhaps not. Do you think for instance that mediums, mentalists, astrologers and the like should be banned ? Aren’t they fraudsters after all ?
In your mind.
I run into people with similar attitudes to yours often. You know, the type who think of themselves as “debunkers” and who aggressively try to prove others wrong while unfortunately having very poor listening skills. These peoples minds always seem already made up and setteled upon a conclusion that they came to in the past that won’t budge or be changed. I always wonder why these people act in such a way and why they don’t, instead, have an open mind and engage in rigourous friendly debate and speak with a less hostile tone. It’s obviously natural to believe that you are correct, but I think that you would learn a lot more if your approach was different. You don’t seem to be here to learn though - and thats the odd part. I think it’s great that you’re here and supplying a conterpoint for debate, but all I see comming from you is ego and a one sided closed mind that will ignore any and all points and make whatever arguments you can to try and prove that the Austrians are a dictatorship worshiping cult who are entirely wrong in their theories. lol I just don’t get your motives. So, what do you hope to accomplish by engaging in this thread? Are you here to learn and test the waters with your own free market theories? Are you here to change the mind’s of the entire Mises Institute because you know for a fact that they are wrong and wasting their time? If you have such conclusive proof (which it certainly doesn’t appear so to me) that the Austrians are wrong in their theories, it would seem that writing a peer reviewed economics paper or even a book would be a better and more scholarly way to go. You wouldn’t want to waste such a brilliant mind here on these forums with us who just don’t get it, right? If you are so profoundly correct, it would seem that a scholarly work would certainly be a better outlet for you.
i guess it was stated how loans would be made with a 100% reserve banking/warehouse system.
most likely it would be time deposits. where hopefully the loaned-out money (most likely unavailable to the time-depositor) from time-deposits gets repaid with interest - making the bank/warehouse and the time-depositor a return.
storage-deposits, for lack of a better term, would simply be the storage, management and transfers of specific amounts of money.
as for the fraud issue…i am not completely sure.
if i have a demand deposit…and the bank truly only holds a portion of the money i deposited, but my account balance indicates that all the money i deposited exists in a ‘balance’ -its just that the money the money is ‘around’.
i guess that means the bank might just have to quickly grab someone elses ‘potentially-demanded’ money to satisfy my demand and hope they dont demand their money.
or try to sell a quick asset (a repoed car??) to satisfy my or others money demands.
or go to a printer to have them quickly print up some ‘money’ to satisfy mine or others money demands.
is this how the ‘fractional reserve’ system works?
if what i have just described above is correct…it would seem more accurate to show only the specificamount money one has ‘in the bank’ after a deposit…to claim what i have read as being called ‘fiduciary media’ … well it would seem that would need to be a different type of account or indicated where how the fiduciary claims were satisfied.
for instance…fungible pile of money is reduced by 10 cents for all depositors because of a demand of 100 units of my deposited money…or a repoed car was sold this afternoon to satisfy some depositors cash demands – so here is your money.
am i incorrect in my understanding of this issue?
Is it actually a competitive advantage? Does the interest rate paid to depositors (or rather, FRB-speculators) really cover the obviously very high risk of loosing all money deposited/invested in the bank account? It seems like such a total loss can happen any day, and simply because of a rumor. An FRB deposit account seems to me to be of much higher risk than owning a stock portfolio. And it seems to give much lower return. Obviously, an FRB account couldn’t be an attractive way to keep liquidity which are needed in order to pay the rent or suppliers on time, if a 100% deposit alternative is available. Even if the FRB alternative would pay a 2% or so real interest rate a year (as compensation for resulting in a sudden 100% loss of all money deposited about once every 25 year on average, following which you are evicted from your home and your company’s is bankrupted).
FRB is not a serious alternative for payments or savings. It could only be attractive to gamblers who speculate in earning a small yearly return by trying to predict the timing of the next bank run.