You know, the money cranks do that all the time. Whether they do it because of ignorance or because of some sort of tie to the banking mafia, sorry!! financial industry, who knows.
You said:
I haven’t seen every single contract currently in existence so how could I?
You don’t need to. If you read the demand deposit contracts of, say, four major banks, you can conclude that other demand deposit contracts are fairly similar. I think that a problem here is the belief that contracts have been designed out of the current regulated and protected banking system (well, slight changes could have come as a result, but the contract itself is not stipulated by the industry, but by its customers all-around). They have been taken advantage of by the current banking system, but the contracts themselves were really born out of demand for a certain service (warehousing, which is why even ten years ago many banks were charging for demand deposits [I remember Wells Fargo did, although at that time there were also banks offering free demand deposits]).
I don’t see the relevance given that I’m not defending the current banking banking system (or the banking system 10 years ago)
Do what out of ignorance? Not defend the current banking system? I guess just about every Austrian economist constitutes a “money crank” in your book
I didn’t say that you were. You apparently did not read what I wrote:
I think that a problem here is the belief that contracts have been designed out of the current regulated and protected banking system (well, slight changes could have come as a result, but the contract itself is not stipulated by the industry, but by its customers all-around).
The demand deposit contract, at its most basic, existed both under the current banking system and under a non-cartelized banking system. It is a warehousing contract. What I’m saying is that the demand deposit contract’s terms (apart from small details) are basically the same under any banking system, because the reason for having them (based on client’s demands) are all the same (money warehousing).
I don’t know what an ‘austrian economist’ is. But I can easily recognize money cranks…
So you are repeatedly bringing this to my attention why? It has nothing to do with Mises’ vies of banking. Nothing to do with a theoretical defense of FRB. Are you just bringing-up a non-sequitar discussion about the current contracts? (If so, thats no problem)
Yeah, apparently those who don’t defend the current system.
Sure ? Isn’t the current system an great example of fraudulent reserve banking ?
Maybe, certainly not fractional-reserve banking though.
Let me rephrase my sarcastic and rhetorical question :
“Isn’t the current system a great example of ‘fraccional’ reserve banking ?”
No.
Oh really ? And why not ? Maybe the evil government is forcing the heroes of free-enterprise, aka banking mafia, to print money ?
Central banks, legal tender laws, barriers to entry, etc…
Maybe. The government does enforce reserve ratios.
Aren’t those things exactly what fractional reserve bankers (aka fraudsters) asked the government to implement so that their criminal ‘business’ model is now wiped out by real free market forces ?
Yeah. Did santa claws visit you this christmas ?
*typo. And edit seems to be temporarily broken.
Possibly. Or it was to avoid competition. Hardly anymore of a strike against FRB than a strike against free market capitalism.
Are you saying it doesn’t?
Possibly yes ? Possibly not ?
I think that’s what I implied ? Competition would wipe out FRB and the banking mafia that ‘profits’ thanks to it.
Quite the contrary, it seems that fractional/fraudulent reserve banking can’t exist unless as a ‘protected’ industry. So I don’t see any strike against the market, but a strike against fraudsters who confuse fraud with fair dealing.
I asked a question…
Competition would hurt established banks, not necessarily wipe out FRB. Just as barriers to competition in retail aren’t in place because they think retail itself will be wiped out.
There isn’t any evidence to support your first sentence.
Clarify and I’ll answer.
I think you’re confused about what a demand for money is and how it related to monetary economics. Of course money supply is not synonymous with money demand and as for an increase in the demand for money simply being an increase in the demand for “capital,” ok… but this is purely an association of money being capital. If an increase in the demand for money is just an increase in the demand for capital, then an increase in the supply of money is also just an increase in the supply for capital.
I’m not sure why you think that’s a valid argument, but I’m interested to hear an explanation.
As far as Shostak’s article goes, I know what you meant, but I’m going to again say that I think Friedman is right on the issue of the velocity of money and whatever you or Shostak say is just incorrect in aspect to monetary economics. Note that I’m talking about monetary economics which relates to how money works in the economy and how much people are participating in the economy with their money.