So are depositors making gifts to the bank in fractional-reserve banking? Or is it fraud?
Is there any other alternative?
It is fraud.
The alternative is to only lend out time deposits.
Consider demand deposits one minute CDs, and you are fine.
Only if the total of one minute CDs were matched with an equal money amount of one minute loans, continuosly rolled over.
They are. That is what you deposited.
But they aren’t. Calling an apple an orange is disingenuous at best, and lying at worst.
What is the difference between them?
You have to show that they are the same. Onus of proof is upon you. Oh, don’t let me stand in your way. I want to be amazed by your linguistic legerdemain. I want to see how you will demonstrate that giving your money to a bank so that only you have use of it is exactly the same as lending it to them for a minute and they’ll pay you interest on it. Please. Show it.
As Walter Block and his colleague demonstrated at a recent conference there is no meaningful difference between a time deposit and a demand deposit. I was saying that for several months prior to their “revelation” by the way.
So all we have are timed deposits.
You loan your money to the bank under the following conditions:
You can have your money back anytime you want. If for some reason the bank doesnt have your money then you agree to wait up to 60 days for the bank to liquidate assets and pay you. Thats all fractional reserve banking is. The banks always place contingency clauses because they understand that if everyone asks for their money back at once that they will not have it. That is not fraud. That is what banks currently do now, that is what the contracts actually say not a hypothetical Austrian fantasy. The whole nature of loaning money comes with risk. If you don’t want to loan the bank your money then don’t. Put your money in a mattress or a safe deposit box or some other storage device.
Your claim that you give the money to the bank so that only you will have use of it is false. The banks do not make this claim, read the actual contracts, that should matter to you.
It is the Austrians trying to confuse the issue. Anyone who actually reads the contracts is not confused.
Block is wong on this.
Demand deposits are not loans. When you can prove that they are, you will have a point. But then you’ll have to prove that you’re loaning all your stuff when you rent a storage unit and place your stuff there, since IT’S THE SAME THING.
Go to it, Max. Show us all your brilliance by demonstrating that you’ve lent all your storage items when you rent a storage unit. Go for it.
Wrong.
The bank, in this case, only pays the money back through government issued fiat. Not by liquidating its assets.
Thats isn’t what the bank is doing, the contract itself even says so.
On another subject, do you have some personal vendetta against Austrians? You’ve repeatedly mischaracterized the Austrian position on FRB, oddly while using an Austrian to support you.
Max has been told about his strawmen. Repeatedly.
Demand deposits are loans. Ask any lawyer, or bank, or go to any court.
So what is that practical difference between demand and 1 minute deposits? One you can withdraw anytime, anytime on normal hours on a workday, the other you will have to wait one full minute. They are sooooo different.
they will also tell you that taxation is not theft.
check your sources maybe?
Then ask libertarian lawyers, Volokh, Barnett, Kinsella.
i prefer not to ask lawyers shielded from a freemarket in law production. but rather libertarian philosphers and economics analysts.
rothbard, hoppe, block, de soto …
I’d say Kinsella is still a good choice.
Then when you rent a storage unit, you’re loaning your stuff to the owner of the storage facility.
Oh wait–you’re not. You lose, Mr. Legal Positivist.
And remember: once upon a time a court said that it was perfectly fine for a person of one skin color to own a person of another skin color. Want to keep going with legal positivism? Yeah, thought not.
Distinct individual items, not fungible monrey, corn or oil in a tank.
Irrelevant and strawman. Bailments are bailments. Prove that A is not A. THAT is the task you have set for yourself.