Do Libertarians Really Want a Free Market in Banking?

[wizardwatson]

Do Libertarians Really Want a Free Market in Banking?.

[ I deleted some inflammatory stuff here that was written to shamelessly troll people to my thread. Apologies to angelatc and others offended ]

Probably.

 

[angelatc]

So if you want a short lesson-and I know you don't want a long one, because you've almost finished downloading this weeks episode of Heroes,

FUck you.

 

[acptulsa]

FUck you.

He does pretty much cross the line from "spurring to action" to "turning his audience off with arrogance", doesn't he? That said, after the let's start a credit union thread I posted a while back fizzled, I do feel his frustration too.

 

[Truth Warrior]

Doesn't free market banking just pretty much go along with the WHOLE free market concept?

 

[angelatc]

Of course.

How many bad loans would the banks have made if the government didn't guarantee payment?

And the government used bad loans as a method of stimulating spending.

The government shuold exist only to enforce contracts, but I have no objections to each state enacting banking laws.

If Arkansas wants to ban loaning money to men wearing red ties, then so be it.

 

[brandon]

How to Bank

Note to slimy treasonous fractional reserve banking scum: Only real banking explained here, none of that institutionalized thievery you pass off as a business.

It appears you are the one in need of a banking lesson. There is nothing illegal or treasonous about fractional reserve banking. It is not thievery either. Furthermore, in a free market banking situation fractional reserve banking would flourish.

 

[wizardwatson]

You know I was going to put a dislcaimer on the end of it, since I was writing in kind of a comic style, but the more I wrote, the more I started to feel, "you know I do kind of feel like this". But whatever, the truth is the truth. The point of the post is that there "is" a free market in banking, we're just not using it, and everyone says sound money is the answer.

Well my brain puts 2 and 2 together and makes four.

As far as fractional reserve banking being legitimate, I totally disagree Brandon. Fractional reserve banking creates an inconsistency, and while it would be 'legal' in the Libertarian utopia, no true Libertarian would use it because it would do them harm.

 

[Truth Warrior]

Of course.

How many bad loans would the banks have made if the government didn't guarantee payment?

And the government used bad loans as a method of stimulating spending.

The government shuold exist only to enforce contracts, but I have no objections to each state enacting banking laws.

If Arkansas wants to ban loaning money to men wearing red ties, then so be it.

If state is involved it's NOT free market.

 

[brandon]

As far as fractional reserve banking being legitimate, I totally disagree Brandon. Fractional reserve banking creates an inconsistency, and while it would be 'legal' in the Libertarian utopia, no true Libertarian would use it because it would do them harm.

Why would it do them harm? It would pay interests on the deposits, and they would be insured by a private insurer.

 

[wizardwatson]

He does pretty much cross the line from "spurring to action" to "turning his audience off with arrogance", doesn't he? That said, after the let's start a credit union thread I posted a while back fizzled, I do feel his frustration too.

I find it very difficult to walk this fine line. Plus I couldn't care less about credibility or making people feel warm and fuzzy. The movement needs a kick in the nuts. I'm not trying to offend people, I just want to know what the hell the plan is.

Is there one? I don't think there is.

Maybe I should start a thread poll.

 

[wizardwatson]

Why would it do them harm? It would pay interests on the deposits, and they would be insured by a private insurer.

Walter Block does a good job explaining the legal inconsistency created by fractional reserve banking. You can read his archives on the subject at LewRockwell. I'm not going to regurgitate here. Just know that I think you're incorrect, I've read tons on the subject, and in my mind, the chance of you convincing me otherwise is astronomically small.

 

[brandon]

Walter Block does a good job explaining the legal inconsistency created by fractional reserve banking. You can read his archives on the subject at LewRockwell. I'm not going to regurgitate here. Just know that I think you're incorrect, I've read tons on the subject, and in my mind, the chance of you convincing me otherwise is astronomically small.

Why would it be illegal for an individual to enter into a contract with a bank to receive interest on their on demand deposits and in return they take the risk of the bank failing?

Fractional reserve banking is not really "saving", it is an investment of sorts. But an investment with extremely low risk. The reserve ratio would be set by the market and the banks would be insured.

 

[acptulsa]

I find it very difficult to walk this fine line. Plus I couldn't care less about credibility or making people feel warm and fuzzy. The movement needs a kick in the nuts. I'm not trying to offend people, I just want to know what the hell the plan is.

Is there one? I don't think there is.

Maybe I should start a thread poll.

Yeah, I know. If dangling a carrot doesn't work, one does start fondling one's cattle prod.

And the interesting thing is that we will soon be hurting for investment opportunities. Stocks are scary, cds and bonds are pegged to a dollar that's about to shed value like my cat sheds fur in the summer, and there's such a crying need out there for credit that viable companies are crashing over not being able to borrow a fraction of their value for a few days to meet a payroll deadline. How can free marketeers let such a demand go unsatisfied?

I know we all want to sit on our precious metals and wait for the COMEX mess to cause them to skyrocket, but they won't actually pay interest or dividends under any circumstances. They also won't help create employment sitting in our safes.

 

[wizardwatson]

Doesn't free market banking just pretty much go along with the WHOLE free market concept?

Well, that's the problem, the free market for everyone is a "concept". People want a free market in banking so we can return to sound money. I'm saying a free market in banking exists, and no one is using it. Therefore, even though all information and all signs point to the solution. No one is acting on it.

Maybe I can prove Mises wrong. Maybe the action axiom is flawed. Maybe humans don't "act" after all and just bounce around in there heads trying to solve puzzles that don't mean anything.

 

[wizardwatson]

If state is involved it's NOT free market.

Bingo, Bango. So next question is, if free-market is to be done without the State, how do we do it?

 

[wizardwatson]

FUck you.

Obviously, my post is funnier to me than others. I wasn't singling out anyone, the criticisms could just as easily be directed at me. In fact more so..I actually work for the government, in the department of revenue no less.

Oh the irony.

 

[Truth Warrior]

Bingo, Bango. So next question is, if free-market is to be done without the State, how do we do it?

Kill the state.

 

[Truth Warrior]

Well, that's the problem, the free market for everyone is a "concept". People want a free market in banking so we can return to sound money. I'm saying a free market in banking exists, and no one is using it. Therefore, even though all information and all signs point to the solution. No one is acting on it.

Maybe I can prove Mises wrong. Maybe the action axiom is flawed. Maybe humans don't "act" after all and just bounce around in there heads trying to solve puzzles that don't mean anything.

SIR JOSIAH STAMP, (President of the Bank of England in the 1920's, the second richest man in Britain)

"Banking was conceived in iniquity, and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen, they will create enough deposits, to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of Bankers, and pay the cost of your own slavery, let them continue to create deposits."


"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks." -- Lord Acton

 

[acptulsa]

Kill the state.

Oh, well, there you go, wizard. Problem solved, obstacle removed, we can go forward now. Drop a quote, perform a miracle. All done but the crying.

Or not.

The Free Bank of Lakotah is an interesting concept. I wouldn't do it exactly that way, but it does show that there are possibilities out there. Like you say, we have to use what free market we do have left. What better way to demonstrate its wonders to those we wish would be committed to it?

Does anyone here work in banking? Anyone?

 

[wizardwatson]

You know I agree with all that TruthWarrior, I'm only saying that we can't kill the State without killing the bank. We can't kill the bank 'through' use of the State, that is futile.

I believe the best avenue available to us is to switch ourselves over to gold and crowd out the FRN's. The faster we expand, the more insolvent banks in our communities will fold, and we'll still have a monetary system.