I’m hardly interested in what pseudo-intellectuals think.
Yes, Mises explains all the flaws in fiduciary media. Too bad it’s beyond your grasp.
This idiot just keeps spewing his garbage until everyone gives up.
Salerno’s point was that the US doesn’t currently have fractional reserves. They is the banks must be fractional reserves.
As for pseudo-intellectuals… Well, you know what. Pass, actually.
And Mises’s disagreements with currency was really more of a bet. Mises thought that fractional reserves would prove to have inadequacies and those inadequacies would not hold up in the end. Now, though there isn’t a completely free market for banking, there is plenty enough evidence to show that the inadequacies Mises thought there would be were simply not there - he took a bet is all, he had no empirical evidence to really test it out, so we can’t blame him too much for being wrong.
However, we can move on from the early 20th century, where these quaint concepts of gold and silver dollars that you can test with your teeth belong.
I’m rather confident that’s not even a valid English sentence, let alone a meaningful one.
Just making up stuff as you go eh ?
So ‘empirical evidence’ has refuted economic reasoning ? And sound money theorists were and are all wrong ? And the dollar has not lost 98% of its value ? And what is it that you smoke ?
Meaning of that sentence ?
wrong. you misunderstood him. salerno would tell you that there are fractional reserves, and that they produce the money multiplier effect, and that they set off boom and bust; only, when analaysing the RISK of bank a run, is there a deviation from what one would have in a free market in banking, to the extent that we are analysing risk there is not ‘fractional reserve banking’
My mistake. Salerno’s point was that the US currently does not have a fractional reserve system. So what’s the complaint about, I wonder?
I’m not making anything up though, read Nigraham’s post on Salerno.
And empirical evidence is just a supporter for one side of a debate. Mises’ bet that fractional reserves would have serious enough flaws to make them lose in the market were wrong, bank runs don’t exist in places where fractional reserve banks invest intelligently and prudently. I can’t think of any other way warehouses would beat out banks than for banks to go under in runs.
No. People that believe in a sound banking system are still in the game; gold bugs, however, are wrong, yes.
So there isn’t a fractional reserve bank but there is, well… Maybe Salerno would have just been safer not trying to confuse words and just saying there’s a moral hazard for banks to lend.
would you also like to know how subsidies create distortions in the market which cause people to act in ways that do not represent valid market trends? Perhaps someone should spoon feed you some vegetable purée as well.
A link?!? NO WAY!
[:O]
If this doesn’t shut me up…
Perhaps Salerno’s point wasn’t that clear ? He’s saying that the banks have no solvency problems because they are partners of the state (fascism), which means they can get the state to print enough bills to pay the banks’ debts to creditors at face value.
Just like the state can pay all of its debt by printing dollars…and destroying the dollar in process. But never mind, in the fantasy world of Rochester, fiat money is eternal and fraud is the non-plus-ultra of efficiency.
To paraphrase something i read in this thread, you can claim gold bugs are wrong all you want. It doen’t make it so. Good luck selling it to intelligent economists.
I think you’re having trouble understanding his point. The pig example is a very simple way to understand why what you were suggesting is incorrect.
wrong, the pig analogy was strawmanning Juan, and is also a false analogy.
As someone else has already explained, it is not about just producing more of something, it is about producing more notes that promise they are backed by something, when in reality they are not.
But we can treat banknotes just like any other good which means anyone can manufacture as many notes as he wants. It’s interesting that Lord Rochester apparently didn’t like that suggestion and retorted that banks would, like drug dealers (or generally gangsters) just literally kill the ‘competition’…
And probably Lord Rochester expects the courts to rule in favor of the banks suppressing competition, in the name of protecting their ‘reputation’…
Which means that Lord Rochester’s “free banking” is no different than banks having a monopoly on the issuance of partially backed notes…
Banks don’t have to issue credit they promise is backed by something. People can use banknotes as the commodity they’re exchanging instead of as a reciept for the commodity.
sorry…I didn’t read all the posts all the way through…
So who’s going to provide the savings ? Or is this the kind of magical ‘credit’ backed by no savings ?
Not sure what you are saying there…
Well, anyone can issue notes, in a free society. If they are not backed by something, then no one will accept them, in a free society. So it is really pointless to talk about notes that have no backing.