Do Libertarians Really Want a Free Market in Banking?

[Brian Defferding]

My idea of free market banking is that a bank can only do what an individual can do. That is transact money back and forth, not create money out of thin air. Therefore no fractional reserve banking.

I think there would be fractional reserve banking, but we would probably see much less of it than today, and deposit insurance would be done privately.

 

[heavenlyboy34]

People really don't understand a lot of things. So, three of my neighbors want to get three washing machines for 100$ each, but they don't have the money. I have an acquaintance who is selling washing machines so I tell him that I will give him 350$ if he is ok with getting the money in half an year and he accepts, getting an IOU from me. Now, each of my neighbors will have to give me monthly installments combined to 130$ each until the 6 months period expires. I just created 300$ that I destroyed when all the debt was paid.

The problem with the FRS it isn't the system itself, which is a good theoretical idea, it is related to transparency and the fact that it's really hard to manage properly in real life.

People, please tell me you don't believe garbage like the perpetual debt crap? That shows the lack of understanding of basic economics. Ugh, I remember when I used to believe that. lol

There is perpetual debt, so long as the system is so politicized, as far as I can see. You're right that the system is theoretically a good idea. I just don't see how it could get beyond theory, considering human nature and the nature of politics and the State.

 

[TGGRV]

There is perpetual debt, so long as the system is so politicized, as far as I can see. You're right that the system is theoretically a good idea. I just don't see how it could get beyond theory, considering human nature and the nature of politics and the State.

I'm referring to the abysmal stupidity of thinking that the interest can't be paid back without taking another even bigger loan. All these people are clueless.

Obviously, as long as the government keeps having deficits on all fronts, there will be debt. I was referring to the thing that the debt can't be paid back.