They’re not questions. They’re merely assertions which presuppose nonexistent inflation.
They are. And now you’re dancing to avoid answering them. How’s it feel to be such a hypocrite?
This is not a question to Rothbardians, but of a general comment for Hayekians like yourself (I’m not taking any position, just advancing a comment). I know that there were several advances in banking theory since Hayek published Monetary Theory and the Trade Cycle (and I have not started Prices & Production, so I don’t know if his opinion changes throughout LvMI’s multi-book tome), and one commenter said that Hayek did advance a more concrete theory of free banking in his 1970s book Denationalization of Money, but I thought Hayek’s opinion on our current credit organization and the business cycle was very insightful: http://www.economicthought.net/2010/01/hayek-the-business-cycle-and-the-financial-system/
It’s on whether or not the business cycle is intrinsic in our system. Obviously, even reader Hayek’s later articles Hayek did not necessarily believe that it was intrinsic to the same degree as the cyclical fluctuations post-1929, but in any case it’s meant more as a passing comment than a real point, or argument (I don’t intend the latter, and did not intend it with the above linked post either).
Recessions are endemic, and even perfect inter-temporal equilibrium can’t prevent them. But recessions are not the same as business cycles, though Hayek did believe that business cycles are also unavoidable, and I tend to agree. The point, though, is that Rothbardians want to forcefully ban free market activities, and I don’t understand why. They give no real economic explanation, but just define it as fraud right off the bat. The problem is a rigid market rate of interest which does not react to the changing natural rate, causing inter-temporal misdirections. How will a 100% reserve ratio fix this, who knows? It can only make this process worse with deflation.
I’m having a hard time fusing Wicksell’s position with Mises and Hayek’s positions.
I have a problem with the free-banker’s theories though, and a lot of questions. Unfortunately, that kind of talk is shunned here.
No, I agree with you. I am a free banker in that respect; I don’t believe that forced 100-percent reserves is a free-market solution.
“Fraud is voluntary?”
yeah…fraud isnt voluntary. some may know they are being deceived and accept it.
i would think that fraud would be something someone wouldnt want to have done to them.
my account agreement with wells fargo says nothing about any demand deposit or gold. and i never had any idea how banks worked until just a few years ago. i thought that my account balance was 100 perent cash…just scattered around at different branches or atms. from what some have said here that isnt the case.
if some want to deposit a money ,or now i guess its fiat currency, and get an equivalent amount of denominated-credit in return and hope that the credit does what the money will do…let them, but dont make everybody have to do it
For Wicksell, the disturbance must be caused by monetary interventionism (third party). He noted market mechanisms which prevent divergence between the market and natural rate for an extended period of time (competitors hoarding notes, international gold flows, ect). But he comes to an incorrect conclusion, namely that deflation (non austrian sense) is always caused by an elevated market rate above the natural rate. Clearly, this is incorrect (prices will fall when the market rate moves towards the natural rate purging malinvestments). Now Mises and Hayek believe that any increase in the money supply will cause intertemporal disequilibrium and push the market rate below the natural rate, but believe that 100% reserves (what Hayek calls the “Chicago Plan”) are “theoretically unsound.” Hayek says in Monetary Nationalism and International Stability that such regulations will be avoided, and they must, by their very nature, fail to address the key issue at hand.
So basically, I’m left with one giant question mark.
Even a 14 year old gets it. Enough said.
enough said from those that say nothing anyway.
“You don’t think there’s a drawer there with your name on it with your money in it?” Her reply was: “Duh - everyone knows that’s not how it works. You don’t get back the same bills you put in, right?” That’s right, hon, that is right.
i dont know of anyone that thinks they get the same bills back…and never heard anyone say they wanted the same bills or demanded the same bills. that was the stupidist shit i have ever seen.
probobly a fake anyway. maybe you should check on that.
does a bank send kittysitting cash to someone else after a cash deposit is made and then poof dollar-credit into an account - or on a ledger at least?
if they do…i never knew it until a few years ago. if they dont why dont you clarify.
or have you said enough?
No matter how many times the straw man in this argument is pointed out for you, you continue to perpetuate this nonsense.
Most of the evidence points to the contrary. You don’t agree, fine. But this is the position of 100% reserve proponents so any argument with respect to the main thesis of your original post is garbage.
That they do is a Misesian and Hayekian position. Rothbard contributed nothing to this.
It doesn’t. It works perfectly! Have your even read Rothbard or do you just search the pdfs for spicy quotes?
It isn’t! No regulations outside the market are required. Rothbard shows that the practice (as currently and historically practiced) is a form of embezzelement in terms of the 2nd party, and counterfeiting in terms of the 3rd. Banks should get no special treatment. that is all! You don’t agree with the analysis of fraud, fine. But that’s a different argument.
They can only do so by deception. Selgin’s scheme of a deposit with a clause known to everybody is NOT what Rothbard is talking about.
This is unrelated to banking. All regulations are enforced by the law enforcing agencies. In a free society, it is defense agencies and private courts.
the monetary base was $836.4 billion. Accordingly, the amount of fiduciary media in the United States was equal to the difference, which was $6065.5 billion
is the above info true? if there are 836 billion kittysitting dolars but 6 trillion non kitty sitting dollars , what is the difference between the two?
Rothbard shows that the practice (as currently and historically practiced) is a form of embezzelement…
the practice? fractional reserve banking + central bank + govt say-so, sometimes??
We are all free bankers in the true sense of the word.
When you phrase it like that, how can anybody believe in such a solution.
But what about
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Demand deposits of banks that are obligated by contractual agreement to redeem all money without delay.
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Bank notes that masquerade as money substitutes when in fact they are fiduciary media.
Rothbard makes assertions which aren’t backed empirically or logically. No Austrian before Rothbard adhered to the “Chicago plan.” Furthermore, Mises supported free banking and fractional reserves in his theory of money and credit. In fact, all Austrians supported free banking before Rothbard, and most still do today. You don’t know anything about monetary theory, so you latch on to this nonsensical garbage, but are unable to justify it with theory. Thus, you call it fraud and redefine terminology.
I’ve already addressed this about 1000 times, is this all you people fall back to? There is no deception, and as such, it isn’t fraud.
Enough of this pathetic nonsense. Do you agree with Rothbard (should I quote him again?) that a free market in banking, as has historically emerged, and fractional reserves, should be banned? Simple question.
Enough with your dancing! Answer my questions.
Such as…
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Rothbard didn’t support the “Chicago plan”. see, you’re doing it again.
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Mises makes it clear that he doesn’t support such a plan only because he doesn’t trust government to properly enforce it. If he has to choose, he prefers the market, as long as contracts are enforced and banks don’t get any special treatment. See Human Action
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Hayek did, at least in theory, which indicates he saw no economic benefit to the issuing of fiduciary media.
Again, You are attributing things to Rothbard that are mainly Misesian and Hayekian.
For precisely the reason that it would seriously curtail the ability of banks to issue fiduciary media. If he saw any benefit from some credit expansion, he would say so. In human action he makes this position crystal clear and in fact, it is almost identical to Rothbard’s analysis of free banking. Again, have you even read Rothbard?
Now there isn’t. It has been legalized and the government guarantees all deposits. Remove the guarantees and it must operate by deception. Are you familiar with the history of banking?
No. you’re starting to play politics here and it is getting on my nerves. Stop quoting and start reading from start to finish.
The practice of embezzlement and legalized counterfeiting within the banking system should be recognized as such and enforced like any other business operating in a free market.
You just keep repeating the same rhetoric. disparagements are healthy but it is becoming apparent that you just want to argue for the sake of arguing.
at least to arrive at a system where any
bank, at the slightest hint of nonpayment of its demand liabilities,
is forced quickly into bankruptcy and liquidation. While the outlawing
of fractional reserve as fraud would be preferable if it
could be enforced, the problems of enforcement, especially where
banks can continually innovate in forms of credit, make free
banking an attractive alternative.
http://mises.org/Books/mysteryofbanking.pdf
i posted this very statemetn on another thread recently. i hope the same people arent asking again.
i dont know it the textcerpt above meant force as a market initiative - picketing the front of the bank or what. considering the rothbards antistatist rants maybe he meant private commandos seizing the bank to auction it off to depositors. the text goes on to say that if it could be enforced, but that it likely couldnt…i guess he means that free banking would be less likely to frb and because it would be less likely it would be better for monetary economic calculation…frb would likely whither, iow.
So Mises supports free banking, thank you for this. If free banking leads naturally to 100% reserves, though it shouldn’t, then fine. The only way to logically get to 100% reserves is with Rothbard’s definition of inflation, that is, printing money, period–that simple. But, on the other hand, if you use Mises’ definition, as an increase in the supply of money beyond the demand for cash holdings, then you can’t logically defend 100% reserves. I’m interested in theory, something you simply don’t know enough to talk about. You have you’re assertions, and that’s fine. Either way, this has nothing to do with my question, so stop dancing.
They’re not counterfeiting money (if we’re on the gold standard). They are regulating the issuance of their own notes–is this not allowed in your anarchist world? I mean, I’ve already addressed this.
Again, thank you for this. Listen, we’ve already debated this topic, and I exploded all of your positions then, so please, spare me the time and answer my question. This doesn’t need to turn into a 17 page thread.
i dont think it necessary to read it from start to finish. a sentence should be able to get a specific point across. he he contradicts himself later in the book then call. i dont even know if it is all true.
John Edward McGee, Jr. (born October 19, 1969) is an American television personality, and psychic medium. He is best known for his TV shows Crossing Over with John Edward
http://en.wikipedia.org/wiki/John_Edward or get a ouji kaballa expert to channel the rothbard so the contradiction can be cleared up