If the E-tickets evolve into a different market from the physical Gold, then there is no fraud. But clearly, if the E-tickets are part of the total stock of gold, then there is deception. If 3rd party holders of gold or new seekers of Gold do not make the distinction then there is fraud, i.e, counterfeiting. The reason you don’t see this may be because part of the following:
Please go learn how FRB works: Credit expansion process that takes place in the system as whole, money multiplyer, etc… then come back and debate this. FRB increases the total stock of money supply. How can there NOT be multiple claims for the gold???
Even the pathetic socialists from the Zeitgeist Movement know that there are multiple claims to the money commodity. It’s the only thing correct they do know.
This is where you are failing. You are completely overlooking the fact that there isn’t a system as a whole, only individuals. The credit expansion only expands a particular banks credit, not all banks. The money multiplier can only multiply the money from a particular bank, not all banks, etc…And increasing the stock still doesn’t constitute fraud or deception as it doesn’t take away what you already have.
Again, do banks give out claims for your gold under the mattress?
3rd party holders don’t need to know how much gold actually exists to know how much they physically have, there is absolutely no fraud taking place. Fraud is when you pass something off as something else. Not being able to differentiate between how much physical gold there is in the world and how many claims there are clearly isn’t the same. Your gold is still under your mattress. If there physical property hasn’t been stolen or altered (which it hasn’t) no form of fraud has occurred.
The Gold under your mattress and in a bank is part of the same stock. That’s only because your claim tickets are accepted as Gold substitutes, which they clearly are not. The total supply of Gold cannot be Gold + Copper unless Copper is parading around as Gold. Are you going to deny this logical fact also? If the total stock of physical gold in the world is only 10oz, but you have circulating claim tickets for 100oz, there is no way you can say that there is a total supply of gold of 110oz WITHOUT deception. If there was no deception, the two would have different markets.
The question is irrelevant! For clearly, you are trying to separate the Gold under the mattress from the claim tickets for the Gold in the bank, as if they were separate market products. Fine, then how can they be part of the same total stock? Logical contradiction! Gold + copper can only be part of the same Gold stock if Copper is paraded around as Gold. i.e. counterfeiting! I’m afraid you don’t have a logical consistent argument.
No, the question is relevant to whether its fraud or not.
You are talking to yourself here and you are still wrong. If I make a chart of all the gold in the world and add copper to inflate it, all I’ve done is make a false chart. This could be used to trick people, but itself is nothing. To counterfeit requires the physical exchange of goods, where one is being passed off as something else (I.E. copper as gold). Such an occurrence isn’t taking place. Your gold is still under your mattress, you haven’t been defrauded.
You are completely ignoring the definitions of fraud and counterfeiting.
When the actual gold is sold, its spot value is based on 110oz and not 10oz. This can only happen if the circulating claim tickets parade as genuine gold substitutes. They clearly are not! If they were, Angurse wouldn’t make the distinction between the gold under my mattress and the gold in the bank..
I tried to make a case for the possibility of fractional-reserve banking emerging (although, not surviving) in a free-market in a blog post, which was eventually responded to by George Selgin and Lawrence White (although, in regards to Prof. Selgin, he responded only because I had made a complete ass of myself by completely mistating his argument in one of his papers; in my defense, I did apologize ). I generally agree with the opinion that if the bank makes it clear that it is practicing in fractional reserves, and the client agrees to still deposit his or her money in that bank, then it is no longer fraud. I, however, hold, that this will result in a bank failure and that the more savvy client will no longer choose to accept that risk in future deposits.
And they are passed of something else! Your claim tickets are passing as gold substitutes. otherwise, the tickets and physical gold wouldn’t be part of the same market. The gold under my mattress is devalued due to your false gold substitutes. There is physical exchange of goods with your circulating claim tickets. It is no different then the Gold and copper example.
What about the 3rd party? How is it that his physical gold is being devalued by additional multiple claim tickets pyramiding on top of the real pyshical gold. Those tickets MUST be parading as real Gold substitutes. The contract between depositor and banker is nothing but a collaboration to defraud others!
Except claim tickets aren’t being passed off as gold substitutes, they are passed off as claims for gold with a clause. Which renders your copper as gold comparison completely inapt.
And your devalued gold is irrelevant (as you’ve already said).
If that was true, then physical Gold would have a different market value then your “claim for gold with a clause”. So this can’t be true. They are passed off as gold substitutes.
). I generally agree with the opinion that if the bank makes it clear that it is practicing in fractional reserves, and the client agrees to still deposit his or her money in that bank, then it is no longer fraud. I, however, hold, that this will result in a bank failure and that the more savvy client will no longer choose to accept that risk in future deposits.