it can’t guarantee redemption and defer payment at the same time
Sure it can, it’s called a moratorium.
I think thats why I called “demand deposits with a clause.” The point is, contrary to what you said, redemption is still guaranteed.
It can if and only if the time limit on the deferral of payment is indefinite. No time limit; i.e. comeback in 50 years in case of bank-run. The free bankers will have you believe that this can be known by the public without deception (fraud), and still claim that the public would accept such tickets as money substitutes. I’m sorry, but this is to basically defy all aspects of the theory of money, as even defined by some of the free bankers themselves.
Yes, see my comment above. If you claim that this can be accepted as money substitutes, then you frankly, need to reconsider what money is.
It guarantees redemption by week X after initial payment has been deferred.
I guess Mises didn’t understand the theory of money. The first sentence is wrong, so is the rest.
week? You are optimistic. In case of a bank run, try years. Yeah, I’m sure you’ll accept these tickets as money just for the sheer principle of it.
And even weeks, means that your tickets ARE NOT LIQUID! So they won’t be accepted as money.
oh so its a time deposit
Mises wasn’t praising FRB in “The Theory of money and Credit”. He just described what is going on as is. Maybe if you manage to finally understand this, you wouldn’t continue to misinterpret “The Theory of Money and Credit”. and read everything backwards.
You’re right, he didn’t. But you’re still inventing terminology.
You are still just making big assumptions. Only the bank is obligated to honour the ticket, not I. And yes, banks in such a situation will probably go out of business… as they should.
In the case of a bank run, they shouldn’t be. I don’t see a problem.
Ensuric,
We don’t have to have this debate. If you’re going to accuse me of inventing terminology, I would suggest, you first be more cautious and read through the many exchanges with others.
Ensuric,
Do you actually agree with the “logic” put forward by Angurse?
what dictionary are you using for your definition of guarantee
Princeton, I suppose, where do you see a conflict?
if they can’t honour their guarantee it isn’t much of a guarantee now is it.
It doesn’t matter what the definition is. One can reinvent the entire lexicon. By your own admission, these tickets do not posses the qualities of money, for
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You cannot even guarantee their liquidity all the time.
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When we talk about money, then liquidity is not even an issue, for money is money, and if it bares a risk of not performing its job as money then it is not money by definition.
This is why deception must always be involved in FRB.
You don’t understand what money is and if you do, then you close your eyes to the problem when ever discussing this issue.
I’m sorry if this question has already been answered, but quite frankly I don’t like digging through twelve pages of material. So I understand that time deposites could indeed solve the problem of actually allowing a 100 percent reserve banking system to actually survive, but exactly what, in a free market society, would be the insentive of banks to start up anything but time deposites? What would be the point of banks to allow anyone to open a banking account for less than a few years? On a free market would there be any purpose whatsoever for non timed bank deposites for those banks which would choose to go 100% reserve?
Profit. Historically, even ten to twenty years ago in the United States, banked charged to warehouse money. There will always be incentives to invest money in time deposits, though, provided by banks looking to loan out that money and make even larger profits themselves. When the rate of interest is high, because time preference leans towards present consumption, then the interest offered on time deposits will be higher, while the opposite will be true when time preference leans towards future consumption.