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A market economy solves this problem of matching borrowers and lenders with brokers, people who do open up offices and who do sit around all day waiting for borrowers and lenders to come in.

The word "deposit" implies a bailment, in actuality it is an unsecured loan to the banker. This bears very little relationship to the broker relationship to which you refer. Very little money would be deposited in banks without the socialistic FDIC protection. (take from each taxpayer according to his abilities, give to each depositor in the inherently unsound fractional reserve bank according to his needs).

Actually Nick, the free market currently has many ways to funnel money from bona fide borrowers to bona fide lenders. Bonds, money market funds, commercial paper, bona fide loan brokers come to mind to name a few. Banks aren’t even the prime source let alone the only source of investment capital---even with all the socialistic special privileges they receive by government force.

But for the vast majority of people, banks are a very convenient form of money brokerage.

The dis-information you put out, in view of all your groupies, is dangerous.

The FDIC doesn't make much sense, but your statement is too broad. Merchant banks in Britain without such insurance do just fine. Banks would remain very much in business without FDIC insurance, or with such insurance and circumscibed use. Attending the government guarantee is a huge bureaucracy that monitors bank soundness, and tries to make sure they write down their loans as needed and book adequate reserves. I think I would prefer that insured deposits be used to buy treasury bills or some such, and shut most of the burearcracy down. There would need to be strict requirements though about full disclosure, and the banks should be required to be audited by deep pocket CPA firms.

The word "deposit" implies a bailment, in actuality it is an unsecured loan to the banker.

Agreed.

This bears very little relationship to the broker relationship to which you refer

Disagree. I have hired my bank to go find people who want to borrow some money I have saved while I don't need it. Money is fungible. Whether the bank loans out exactly the same money is indeterminable. They will collect a fee by charging a spread between the interest the borrower pays, and the interest they pay me. They earn this fee by finding the borrower and arranging the transaction. I call this brokering, as in "acting as an agent for others, as in negotiating contracts, purchases, or sales in return for a fee or commission." I suppose we could hire lawyers and call it a reseller arrangement, but for purposes of this thread, that's a quibble.

Very little money would be deposited in banks without the socialistic FDIC protection

You got a pick in tomorrow's third at Aqueduct? I could use a guy that knows the future. Seriously, you have my agreement to strike the FDIC from your next budget. Geico will be on me the next day, like ugly on an ape, trying to sell me Depositor's Insurance. That's probably a better way to do it anyway. Now we gotta watch out for the FDRC, the federal re-insurance corp that bails out Geico when it goes down trying to pay off Citibank's depositors. We have to put the feds in there somewhere; otherwise when it all comes down on our heads in The Giant Collapse, the government will be the only thing left standing. You sure you want that? I say put 'em in.

Bonds, money market funds, commercial paper, bona fide loan brokers come to mind to name a few.

Yeah, your list of et ceteras is about like mine. I had those check-into-cash places in there, too. Big push on for diversity, you know. Still, all this talk about venture capitalists and Wall Street Wizards really misses a big chunk of America. No Wall Street investment house wants to talk to some guy who wants to open a cash management account with a hundred bucks. And no Silicon Valley venture capitalist wants to see a business plan for a flower shop. You say that "Banks aren't even the prime source let alone the only source of investment capital," and I'm sure that's true. The stock and bond markets do a good job of that... for General Motors.

A whole bunch of people run around these threads talking about how we're all being turned into wage slaves by the bankers, and yet it is the bankers who are out there every day visiting the mom-and-pop manufacturing companies that could could no more go public than fly, loaning them the working capital they need to expand. More often than not, it's bankers who loan the money for some guy's dream of having his own restaurant, or for adding the second location across town. These people aren't high tech entrepreneurs, and they aren't looking to raise $40 million. Take banks out of that picture, and a whole bunch of upward mobility will disappear from America, not to mention most of our jobs. The guy who said "it takes money to make money" was absolutely right. For the vast majority of American small business people, banks are where that money is.

But for the vast majority of people, banks are a very convenient form of money brokerage.
The dis-information you put out, in view of all your groupies, is dangerous.

I assume this refers to the dispute above concerning the meaning of the term "broker," or a lament that the sorry state of customer service in banks makes them no longer convenient. If it is a claim that the "vast majority" of people in America neither borrow nor lend through banks... well, let's just say you couldn't have meant that. As for what 'broker' means, I posted the dictionary.com definition above. Your dictionary may vary. But if your dictionary's definition of 'broker' does not include earning fees by arranging transactions, then it's a kookburger dictionary and you need to get the new, official, revised Federal Reserve dictionary instead.