Market Anarchy

logicallypositive:

baseballlibertarian:

logicallypositive:

baseballlibertarian:

a-petro-manifesto:

Thank you!

I’ll be doing a little extra reading this weekend now. 

Fractional reserve banking is out right theft and fraud.  Bankers steal from their depositors with the hopes that they don’t all come back looking for what is rightfully theirs.  As soon as a bank lends out more than it’s liabilities they become insolvent. Giving out money not backed by anything only causes massive inflation.  As it did all through out the history of banking. 

The only thing that has propped up the banks is government intervention.  Many times through out the short history of the United States the government has made it illegal for people to organize bank runs and/or just suspended banks from giving the depositors what is rightfully theirs. 

Unless you want to legalize theft and fraud.  Fractional reserve banking should be treated as such. 

If people want to use a system of fractional reserve banking and voluntarily choose to do their banking with such an institution knowing full well they engage in fractional-reserve practices, why should they be stopped from doing that? A fractioanl reserve bank is not without benefits. Namely, the expansion of credit, as long as it is sustainable, offers depositors a better return than 100% reserve banking. Granted there are risks associated with such a bank, but that’s for the consumers to decide, not for me or you.

Theft is theft.  Fraud is fraud.  I don’t understand how anyone would be okay with it?  Under your theory I should be able to steal from my employer at any point just as long as I pay it back before anyone notices.  Since theft is only theft if you’re caught?  Is that what you’re saying? 

Any bank that lends out more money than it holds is insolvent.  It is as simple as that. Banks liabilities, their depositors, are always due unlike most liabilities that have to be paid a set date. 

If banks want to lend out money that isn’t theirs they can offer slightly higher interest accounts that can’t be redeemed for a certain number of years.  Use that money to lend out, in the hopes that they collect a profit by the time the account is due.  That’s how banking should be. 

It’s not theft or fraud as long as the bank discloses they are using fractional reserves. The bank is disclosing their practices. There is no fraud because there is no deceit. How can you steal from the willing?

They would be stealing from not only the “willing” but also the rest of society by devaluing the currency through inflation.  I’m sure you know that money created out of thin air, fractional reserve banking, causes inflation and lowers the purchasing power of everyone.