Lawrence H. White says Fractional Reserve Banking can be productive?

[Maxliberty]

@GilesStratton

Why don’t you educate yourself about the legal nature of the contract in question? Once you’ve done that you’d know that the monetary irregular deposit contract is nothing more than a contract in which one individual and the bank made a deal to store the goods (money) of the person in question, meanwhile keeping the goods (or same amount of, in the case of a tangible good: money) available to the depositor.

Why is the bank required to make this contract? The banks are not making this contract now. Why are they required in a free society to make this contract? If you want a demand contract then make one but that should not restrict the bank from having other types of contracts.

@GilesStratton

It simply is not enough to have goods of the same “value” in reserve, since value is subjective.

Why is the bank prohibited from making a contract that does exactly this?

@GilesStratton

Then you clearly do not see the point of the contract in question, do you? The entire point of the contract in question is that the depositor does not intend to make a loan, he wants to retain full availability of the goods that he is depositing. If the bank creates loans and as such is unable to fulfill its obligations it turns the depositor in a forced creditor, and such the bank is liable to paid restitution for the fraud it has commited or the contract was void from the go and the bank owes him at the very least compensation.

The problem is your contract is a fiction. I have never said that a 100% demand deposit account could have fractional reserves. What I have said is that the bank can make non demand accounts that allow for some immediate redemption. What you have consistently said is that in your dictatorship that this would be prohibited. Why don’t you stop lying and address your failed cult ideology.