Which do you support?
I endorse the former; although, of course, market forces could conceivably determine 100% reserves to be optimal (but I doubt it).
I have responded to that comment by Ensuric, in which he agreed that the choice is not between MET and 100% reserves. It’s a false choice.
Whilst one can be a fractional reserve banker and not be a monetary equilibrium guy, I don’t think one can be a full reserve banker guy and a monetary equilibrium guy.
In any case; feel free to make the case neoclassical. Maybe you can convince me.
I honestly haven’t “decided”, yet. At first, I was a dedicated “full-reservist” free banker (not in the sense of a required full-reserve, but only of the opinion that in free banking solid banks would usually maintain close to full reserves; I didn’t buy into the monetary equilibrium theory). However, since then I have grown more towards monetary equilibrium, although at this point I have just decided to be undecided. I’ve been busying with other reading, but at some point my intention is to finish Selgin’s The Theory of Free Banking (my copy was apparently previously owned by Larry Sechrest, so I can enjoy all his side notes as well).
Stupid question: do full reserve Austrians believe that the main reason FRB is illegitimate is because of fraud against the depositor for loaning out his money or because of fraud against the borrower of the fractional loans?
The validity of MET can be recognized or refuted regardless of one’s stance of fractional reserve banking. Its theoretical basis does not depend or constrained by the need to have fractional reserve banking. It can be, in theory, applied to any monetary regime