They would demand warehouse institutions. These institutions would hold onto their savings for a fee.
Why do you try evade the point by resorting to a theory about demand.
Are these claim tickets masquerading as “demand deposits” or aren’t they? It’s a very simple question which I think I am entitled to get a Yes or No response without talking about demand. We can talk about demand later.
You voluntarily open bank accounts. You voluntarily accept money. You don’t have to participate if you don’t want to.
How would this address the depreciation due to credit expansion. You canmake an argument that FRB is a better system in aggregate, but on an individual basis some will be losers whether they agree or not.
This question has been answered for you already. No. The claims are “demand deposits with a clause.”
This is NOT true, as I am trying to point this out to Ensuric. The owners of Gold did not choose to participate in your scheme. The multiple claim tickets issued for the same amount of gold are masquerading as perfect substitutes, devaluing the value of Gold, defrauding all owners of Gold.
This sounds alot like a time deposit
There not masquerading as anything. They are media of exchange, people know the deal, and voluntarily agree. Stop using Rothbardian jargon.
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They aren’t masquerading as gold substitutes. See last post.
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You don’t own value!
are they exhanged at face value or a discounted rate because they are ya know not really worth what is printed on them
And since oranges are not apples, demand deposits are not demand deposits with a clause. The public, unless deceived, will never treat them the same.
In fact, FRB cannot survive without this deception. It never has! Once the public finds out, it will always initiate a run on the bank.
I mean, it will only devalue gold if it causes inflation. Either way, I’m not satisfied with the free-bankers position; there are a lot of flaws. This argument, though, is very weak, and goes against many libertarian principles. The free-bankers have to show the connection between money demand and the natural rate of interest (and also the labor market), which is implied in Mises and Hayek’s work. Also, their argument seems plausible because the entire subsistence fund (savings) isn’t required at all times–Bohm-Bawerk says half will suffice.
Impossible! The soundness of a bank relies on the fact that other people do not redeem their money, people know of this, they know that everybody else knows of this, yet they still think it is not plausible that others may get worried and go take out their money. That is basically what you are claiming.
Never happened and it never will. All 100% understood this, which is why it is easy to show that deception is always part of the scheme.
The purchasing power of the bills won’t decline insofar as the supply doesn’t exceed the demand for cash holdings. The free-bankers usually say “we want to keep MV stable, which means prices should decline as a result of productivity gains–increasing the purchasing power of money.” But I’m not happy with this “keeping MV stable” monetarist bullshit.
Because two different goods have never been traded at the same price before…
Why not?
They are exchanged at whatever value the exchanging parties agreed to.
Let me put it in another way,
Once everybody knows that if let’s say more then 10% redeem their claim tickets, then the rest loose their money, ALL will act in a panic to redeem their money as quickly as possible. It’s no different then saying that once everybody or just enough people, finally understand that the US dollar is over, then all we act NOW and dump their dollars.
Yes, momentarily, even a car and a call girl can cost the same. Are they substitutes?
My point exactly.