That’s still a fractional reserve. It is just forced matching of lending periods with savings periods. The mismatch of those (short term savings vs. 30 year lending) can kill a bank during a period of rising interest rates.
“That’s still a fractional reserve. It is just forced matching of lending periods with savings periods. The mismatch of those (short term savings vs. 30 year lending) can kill a bank during a period of rising interest rates.”
I don’t think you watched the video that I implored folks to watch. This is only step 2 in a process of totally transforming the way banking is done.
Until one figures out that the $14.4 trillion that the government owes has already been floated through the same fractional-reserve system, such that every dollar in circulation today actually represents debt. Debt now owed by U.S. taxpayers, to the degree that when my twin granddaughters are born in October, they will be born owing more than $46,000 to the government.
And until it is learned that every dollar created through fractional-reserve banking erodes the value of each existing dollar. To the degree that, since the creation of the Federal Reserve, the dollar has declined in value by some 95% and change, where what used to cost $1 in 1914, now costs $21.92.
That the first step of the solution, which some have overlooked, is to replace the Federal Reserve Note with a United States Note which would be created debt-free to the government and spent into the economy. Whereby the entire national debt may be repaid within a year or two.
Who cares about the banks, they would have all went bankrupt in 2008 without massive bailouts. I would rather invest in stocks or private arrangements than let the banks pay me 0.25% interest while they collect 30% on credit card debts. We forget that we don’t make any money off of banks, all they do is buy and sell debt, we are not prohibited from investing our own capital directly into profit making enterprises or other profit sharing arrangements.