Posted on 01/10/2011 6:17:58 AM PST by IbJensen
If you eliminate fractional reserve banking, you’re eliminating banking as we know it. You’re left with bank time deposits.
And I bet even then you wouldn’t really eliminate the possibility of bank runs. Any bank that was rumored to be in trouble, would have people showing up trying to get their time deposits back earlier than agreed.
But a lot of capital would be setting on the sidelines, unable to earn interest because their owners aren’t willing to commit to a timeframe.
Again, where has this scheme worked. Didn’t the Austrian school actually try this in Austria for a short amount of time before it was abandoned?
I'm not aware of,or even if there is such a thing as a Austrian School bank, but an era that I would consider more Austrian( ish ) would be America from it's discovery, up to the founding of the Federal Reseve( with the exception of the Civil War ).
We had basically free banking. Although most banks were state chartered banks. It wasn't centralized and we had US God dollars as a bench mark. I think that was our best period, all considering.
Look at that era's phenomenal, real,physical growth in real, physical capital. In population,in internal improvements, in cities built, wealth, increase in living standards and quality.
Now, many of our once great, productive wealth producing centers( cities ) are tax consuming, welfare spawning, pension debt centers. Zombie cities, kept alive by financial shenannagans. Even state now, take California, Michigan, Illinois. Those were once states so wealth creating, that we named battle ships after them. Now productive people and companies of productive people flee them.
Non of this AT THIS SCALE would of happened in the pre Federal Reserve banking system. These companies, states would of been spanked, hard.
I guess we now live in a era of Self Esteem Government where every one is equal.
Hardly makes my deposit available to me upon demand.
You don't have clear title to your bank account?
Legally, sure. Until everyone else wants their deposits as well. Then the rules change for some reason.
Why would banks accept demand deposits?
For storage/security fees.
It's a bad idea.
Heh, cause fraud is such a good idea. Gotcha.
How available was your deposit when you tried to cash in your CD early?
Heh, cause fraud is such a good idea. Gotcha.
Did you prove fraud on this thread? Which post was that?
How old were you when you discovered banks could pay interest because they made loans? Was it recently?
My deposit is NOT available to me if I used it to purchase a CD. That is what a time deposit is all about.
What's the matter? You didn't address my comment about clear title to my demand deposit. Under normal circumstances, I can at will gain access. But why should the laws have to change if others wish to gain access to their demand deposits at the same time?
That is fraud. There is no need for legal banking protections if banking is honest.
No, just remembering that I was probably 5 years old when I first understood interest, loans and deposits. I never thought fraud was involved, why do you?
My deposit is NOT available to me if I used it to purchase a CD.
You can withdraw money in a CD.
You didn't address my comment about clear title to my demand deposit.
You have clear title.
Under normal circumstances, I can at will gain access.
Excellent! Then why are you confused?
But why should the laws have to change if others wish to gain access to their demand deposits at the same time?
The laws don't change.
How does fractional reserve banking fit in this definition? Or maybe you have a different definition in mind?
The laws don't change.
You are correct. They are already written and don't need to change, because this has happened many times already. But as you still refuse to acknowledge, I WILL be refused access to my demand deposit, if too many others wish access to theirs. The bank can and must refuse my demand, and everyone else's. Simply because they wish access to what should be available to them upon demand. It may be legal, but that doesn't change what it really is.
You do not think it an "intentional perversion of the truth" for a bank to say that you may demand access to your deposit at any time. When they know for a fact, that the simple act of mass redemption makes that impossible?
And you are incorrect.
But as you still refuse to acknowledge, I WILL be refused access to my demand deposit
You haven't been refused access yet you still claim fraud?
Maybe you should post the agreement you signed when you opened your account?
Did you look at the chart? Prices are almost exactly the same in 1870 and 1910.
Hmmm, are you hinting that perhaps I don't really have clear title to my demand deposit? Do I not really have the ability to demand my deposit back at any time?
Imagine that.
That's not what the chart says.
No.
Do I not really have the ability to demand my deposit back at any time?
You can demand it at anytime. Imagine that.
Sure I can make the demand. But the bank has no obligation to return my money if too many wish the same.
It OK. You can admit it. We all know already. Go ahead. Its OK. Really.
You think the bank can keep your money? Forever?
You can admit it. We all know already.
That there is no fraud involved? Do we all know that?
I guess we are done then. thx
Why wouldn't I acknowledge that bank reserves are smaller than their deposit base?
If you ever read your account paperwork, I'm sure it will say something like, "You can access your demand deposit at anytime, certain restrictions apply".
Maybe you'd stop crying fraud?
The banking panics of the 1800's were caused by this fraud. The problem is that like any other ponzi scheme, it must have new inflows to keep moving forward. The central bank as lender of last resort cured the symptoms, but really just expanded the ponzi base.
Bernie Madoffs victims were thrilled right up til the end too.
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