I don’t think I’ve brought any such thing into the discussion, ctrl+f my posts. Is it too much to request that you actually read rsthompson?
Sure. But, like I said before, the current monstrosity…
A monstrous thing, person or act; The state of being monstrous
Not quite,
anything banking system (with a central bank + legal tender laws + regulations +…+n) = mosterous = harmful
Pick any definition besides one that can be mixed up with a fairy godmother. Sheesh.
This one is fitting:
monstrous - atrocious: shockingly brutal or cruel; “murder is an atrocious crime”; “a grievous offense against morality”; “a grievous crime”
Thus, I have a few questions for Rothbardians:
Where’s the consistency from the “anarchists?”
i guess the poster here means rothbardians = anarchists, austrians too? i will assume they do. but its vague and unclear.
| Ludwig von Mises… | Continued inflation inevitably leads to catastrophe. |
|---|
…a system fatally flawed by the existence of central banking and fractional reserves.
…Fractional..reserve S&L banking is pyramided dangerously on
top of the fractional..reserve commercial banking system…
…at times like these that the speciousness of apologists for our banking system hailing fractional reserves as being as sound as the building of bridges…
…cycles cannot be blamed on the free market. The flaw that makes the cycle possible is fractional-reserve banking, in which a bank is permitted to create credit in excess of the deposits that have been made to it…
…This sort of swindling or counterfeiting is dignified by the term “fractional-reserve banking,”…
…under free competition, and without government support and enforcement, there will only be limited scope for fractional-reserve counterfeiting..…
…National fractional reserve systems are the real source of most of the difficulties blamed
on the gold standard…
…a brilliant series of essays written between 1855 and 1879 showing how a fractional reserve monetary system causes depressions. Argues forcefully for a 100-percent-reserve gold standard throughout…
…Those who view
fractional-reserve banking as harmless (beneficial?) financial intermediation fail to clearly recognize
two principles of praxeology; no object can be owned by more than one party at a time and
there is a “fundamental difference between property and property titles.”…
…bank credit deflation that threatens to liquidate an unsound financial system built on fractional-reserve banking…
…The fractional-reserve commercial banks are inherently bankrupt, and sooner or later
this becomes obvious…
..For most of his career Hayek viewed a system of fractional-reserve banking as inherently unstable, endorsing a role (in principle) for government stabilization of the money supply…
…The problem, therefore, is not debt but credit, and not all credit but
bank credit financed by inflationary expansion of bank money rather than
by the genuine savings of either share holders or creditors. The problem in
other words, is not debt but loans generated by fractional-reserve
banking…
…There therefore must be something about all banks commercial,
savings, S & L, and credit union—which make them inherently unsound.
And that something is very simple although almost never mentioned:
fractional-reserve banking…
…Instead of this sound, noninflationary policy of 100% reserves, all of
these banks are both allowed and encouraged by government policy to
keep reserves that are only a fraction of their deposits…
…Banking is not a legitimate industry, providing legitimate service, so long as it continues to
be a system of fractional-reserve banking: that is, the fraudulent making
of contracts that it is impossible to honor…
…it would be far better to suffer a one-shot deflationary contraction of the fraudulent fractional-reserve banking system, and go back to a sound system of 100% reserves. … GO BACK TO??? HUH??
…depositors must be allowed to go under along with the S & Ls. The
momentary pain will be more than offset by the salutary le ssons these
depositors will have learned: don’t trust the government, and don’t trust
fractional-reserve banking…
…a fractional-
reserve ratio bring about credit expansion19 unbacked
by real savings, leading to artificial, inflationary economic
booms, which finally revert in the shape of crises and economic
recessions, in which banks inexorably tend to fail…
…a 100-
percent reserve requirement would eliminate banking crises and
economic recessions more effectively. It is not sufficient, because even if
banks’ stockholders had unlimited liability, bank crises and economic
recessions would still inevitably recur when a fractional reserve is used…
…Usher shows that the modern banking
system arose from fractional-reserve banking (itself the result of
fraud and government complicity…
…fractional reserve banking and artificial credit expansion, which in the
first stage appeared to spur strong economic growth. The
whole process ended in a general economic crisis…
…Hence, the systematic failure of fractional-reserve private banks not supported by
a central bank (or equivalent) is a fact of history. Pascal Salin overlooks
this fact in his article “In Defense of Fractional Monetary Reserves…
…Some do not object to fractional-reserve banking, so long as it is private banks that engage in this practice. Competition among banks, so it is claimed, prevents inflation: if one bank overexpands, other banks and their customers will demand redemption, and so bring the reckless bank back into line. Kevin Dowd, an editor of this volume, and Lawrence White, one of the contributors, support this view.
Rothbard thought otherwise…there is a little inconsistency i guess.
…As entrepreneurs
may err in this function, losses may result much like
the market has been plagued with recently; this in no
way constitutes fraudulent activity. To the extent that
this practice is combined with fractional reserve
banking, we see the increased possibility for entrepreneurial
error to result as the coordination process…looks like a tad bit of inconsistency.
…The more titles a bank chooses to hold, the more titles it can issue, and this
permits other banks to do the same thing. Insofar as bankers do this, they reduce
the title-issue costs of their fellow bankers to virtually zero. And all bankers have
a strong incentive to do this since they all gain from the fractional-reserve
business at the expense of the other market participants…
…As Mises has demonstrated, there is no question that, from the point of view of opponents of inflation and credit expansion, free banking is superior to a central banking system (see below). But, as Amasa Walker stated:
Much has been said, at different times, of the desirableness of free banking. Of the propriety and rightfulness of allowing any person who chooses to carry on banking, as freely as farming or any other branch of business, there can be no doubt. But, while banking, as at present, means the issuing of inconvertible paper, the more it is guarded and restricted the better…
…
as we contend, banks are inherently bankrupt and “runs” simply reveal that bankruptcy, it is beneficial for the economy for the banking system to be reformed, once and for all, by a thorough purge of the fractional-reserve banking system. Such a purge would bring home forcefully to the public the dangers of fractional-reserve banking, and, more than any academic theorizing, insure against such banking evils in the future…
…
Hülsmann.. Explains how competitive banking in a fractional-reserve system perverts
Say’s Law and leads to business cycles. Deals with alternative solutions to this problem: 100 percent banking…
…A fractional-reserve bank is intrinsically instable…
all of the above phrases seem to indicate more consistency in the rothbardianz-anarchian-austrianz view than inconsistency.
these phrases seem to consistently say frb is bad, flawed, unstable, increased possibilty for error, leads to crisis, causes depressions, swindling, counterfeiting and sometimes fraudulent.
pretty consistent themes concering frb…idont see any of the roth-anarca-austianz saying thigns come up roses with frb?
i hope the poster isnt lying or misinformed aobut the existence of rothbardianz.
do you believe that fractional reserve banking exists now - withing the current federal reserve / commercial banking system in the us? answer this one first, sheesh.
number 2 for you…this doesnt seem that dificult to answer…is there a non free banking fractional reserve banking system that now takes place?
this time without fairly land adjectives.
i guess credit expansion is stems from frb? is there consistency?
…public opinion by and large no longer denies the two main theses of the circulation credit theory: viz., that the cause of the depression is the preceding boom and that this boom is engendered by credit expansion…do market particpants seek depressions???
..The dearth of credit which marks the crisis is caused not by contraction but by the abstention from further credit expansion. …
…Credit expansion is what was responsible for both the stock market and the real estate bubbles. …To be responsible for a bubble and its aftermath is to be responsible for a mass illusion of wealth, accompanied by the misdirection of investment, overconsumption, and loss of capital, and the poverty and suffering of millions that follows…
…In a credit expansion the government artificially lowers the interest rate, thereby
spurring investment in higher stages of production. There is a temporary “boom” period
rof illusory prosperity…
… Theres no question that todays soft credit expansion has distorted production patterns,…
…One of the unfortunate consequences of credit expansion is that many projects which were formerly passed over by investors will be undertaken because of the incorrect signal sent into capital markets…
…The monetary theory holds that money and
credit-expansion, launched by the banking system, causes booms
and busts…
…The malinvestment caused by credit expansion diverted production into
lines that turned out to be unprofitable (i.e., where selling prices
were lower than costs) and away from lines where it would have been
profitable…
…Actually, bank credit expansion creates its mischievous effects
by distorting price relations and by raising and altering prices
compared to what they would have been without the expansion…much worse than mischevious
…The culprit then, is and was, not taxes or greed, but above all
inflationary credit expansion generated by the Fed…
…economy paid a heavy price in a lengthy recession that
burst the “bubble” of the inflationary boom,…
…pouring into the economy more of the very virus (inflationary
credit expansion) that caused the disease in the first place. Only
in Cloud Cuckoo-land, to repeat, is the cure for inflation, more
inflation…or maybe a knock on the head for those who write such lies.
…to stop the inflationary part of current crisis, the Federal
Reserve can stop, permanently, all further purchase of any
assets, or lowering of reserve ratios. This will stop all future
inflationary credit expansion…
…recessions will be around to plague us so
long as there are bouts of inflationary credit expansion which
bring them into being…
…But poor quality loans and investments are always the consequence of central bank and bank-credit expansion…
…problem, therefore, is not debt but credit, and not all
credit but bank credit financed by inflationary expansion of
bank money rather than by the genuine savings of either shareholders
or creditors. The problem in other words, is not debt
but loans generated by fractional-reserve banking.
this theme is pretty much what all the anarca-bardia-austrians (aka cinsistency) seem to say about credit expansion?
is it true??
rsthompson, do you often talk to yourself, out loud?
rsthompson is no longer with us, so don’t bother to reply to him further.
That was very confusing