Fractional reserve lending is NOT inherently fraudulent

[Alawn]

Whatever you are saying Optatron I can't read it. I have you on ignore. Oh well because you haven't made any rational sense this whole thread.

 

[Optatron]

Whatever you are saying I can't read it. I have you on ignore. Oh well because you haven't made any rational sense this whole thread.

What makes you think I care what you think?

 

[Optatron]

I want to clear something up. Fractional reserve banking does multiply money. Going back to the original post, it's true that the banks are practicing scenario A (deposit $10, lend out $9) but the end result is scenario B (deposit $10, $100 in credit gets created) Here's how:

The fed gives $10 to bank A.
Bank A lends $9 to borrower A.
Borrower A gives the check for $9 from bank A to pay depositor B.
Depositor B deposits the $9 check in bank B.

Bank B returns the check to bank A, and bank A gives $9 in actual reserves to bank B.
Bank B deposits $0.90 in reserve, and lends out $8.10 to borrower B.
Borrower B pays depositor C with the $8.10.
Depositor C deposits $8.10 in bank C.

Bank C returns the check to bank B, and bank B gives $8.10 in actual reserves to bank C.
Bank C deposits $0.81 in reserve, and lends out $7.29 to borrower C.
Borrower C pays depositor D with the $7.29.
Depositor D deposits the $7.29 in bank D.

Bank D deposits $0.72 and lends out $6.57.
Bank E deposits $0.65 and lends out $5.91.
Bank F deposits $0.59 and lends out $5.32.
Bank G deposits $0.53 and lends out $4.78.


And so on and so forth.
At this point, the total amount of credit extended to the people is:
$9 + $8.10 + $7.29 + $6.57 + $5.91 + $5.32 + $4.78 = $46.97

So that's $46.97 worth of credit chasing $10 of actual reserves. So when all is said and done, the banks really are holding in reserve a fraction of what they lent out. It's not too hard to see how $10 becomes $100 through this process.

Yes, BUT IT ENDS THERE.

Banks can't take $47 now and turn it into $200+, because they're restricted by the 1/10 limit (or the fact there's only $10 on reserve)

Furthermore, it's not actually $47 in circulation or operation, since the minute Bank A lends out $9, and keeps $1, nobody but the original $10 depositor thinks the bank has $10.

Every bank is either told, or expecting Bank A report they have only $1 (and they can't touch it anymore).

The more ACCURATE description would be, that there's $10 on reserve, and actually $10 printed. $10 is just being stretched, borrowed and unsecured as loans by different parties which ALL KNOW THEY CAN'T GET IT AT ONCE.

It's no different than a timeshare, except you're not promised how long you have your share, you're just told you can get it when you want to, and try your luck.

 

[Feenix566]

Yes, BUT IT ENDS THERE.

Banks can't take $47 now and turn it into $200+, because they're restricted by the 1/10 limit (or the fact there's only $10 on reserve)

Furthermore, it's not actually $47 in circulation or operation, since the minute Bank A lends out $9, and keeps $1, nobody but the original $10 depositor thinks the bank has $10.

Every bank is either told, or expecting Bank A report they have only $1 (and they can't touch it anymore).

The more ACCURATE description would be, that there's $10 on reserve, and actually $10 printed. $10 is just being stretched, borrowed and unsecured as loans by different parties which ALL KNOW THEY CAN'T GET IT AT ONCE.

It's no different than a timeshare, except you're not promised how long you have your share, you're just told you can get it when you want to, and try your luck.

Walk down the street and ask 100 random people whether or not they could go to the bank today and withdraw the entire contents of their checking accounts in paper cash. How many of them do you think will say yes?

 

[Optatron]

Walk down the street and ask 100 random people whether or not they could go to the bank today and withdraw the entire contents of their checking accounts in paper cash. How many of them do you think will say yes?

how many will say they even want to?

whose fault is it they don't know their rights?

who told them to bank with somebody they can't trust?

 

[axiomata]

Walk down the street and ask 100 random people whether or not they could go to the bank today and withdraw the entire contents of their checking accounts in paper cash. How many of them do you think will say yes?

Walk down the street and ask 100 random people whether or not they could get in a car accident today and be fully covered by their insurance. How many of them do you think will say yes?

Extrapolate your random survey results to the whole country; add up the worth of of the insured autos on the road, and make note of the balance sheets of all the insurance providers. I bet the leverage would put the 10:1 reserve ratio to shame.

I've been very disappointed with the defenders of forced full reserve banking in this thread. Besides not knowing what the act of defrauding requires, they haven't explained who is going to enforce the reserve requirements, they haven't explained the free-market existence of other similar systems such as insurance where parties agree to contacts with the understanding of the risk that there is not enough cash backing all the potential liabilities if claimed at the exact same time, and they haven't explained the success of free-banking in Scottland.

 

[Optatron]

Walk down the street and ask 100 random people whether or not they could get in a car accident today and be fully covered by their insurance. How many of them do you think will say yes?

Extrapolate your random survey results to the whole country; add up the worth of of the insured autos on the road, and make note of the balance sheets of all the insurance providers. I bet the leverage would put the 10:1 reserve ratio to shame.

I've been very disappointed with the defenders of forced full reserve banking in this thread. Besides not knowing what the act of defrauding requires, they haven't explained who is going to enforce the reserve requirements, they haven't explained the free-market existence of other similar systems such as insurance where parties agree to contacts with the understanding of the risk that there is not enough cash backing all the potential liabilities if claimed at the exact same time, and they haven't explained the success of free-banking in Scottland.

I agree fully, other than the Scotland part I'm not informed of

 

[Conza88]

No, it doesn't increase the money if it's not being used or circulated, also, if it's not in the terms of agreement where, how the money is represented, or the loaning party fails to verify the existence of the money, it's THEIR FAULT.

By your definition, selling tobacco is fraud because they didn't tell you it's absolutely deadly for you.

Wrong.

YouTube - Bill Posey conitinues Ron Paul's questioning of Bernanke on inflation/transparency 07/21/2009

 

[Conza88]

no, but lottery, retail and alternative health products are.

No matter who agrees, as long as you don't delivery 100% of your promises, it's fraud.

This is coming from somebody who believes it's OK to copy somebody's book without permission and compensation, that you can't own ideas of intellectual property, but somehow you don't get to utter the words "this represents gold" if you don't literally mean it (and if you do, you're a fraudster if you don't deliver).

19. PROPERTY RIGHTS AND THE THEORY OF CONTRACTS

 

[Optatron]

19. PROPERTY RIGHTS AND THE THEORY OF CONTRACTS

For somebody who said

He owns the paper the words are printed on, but he doesn't own the words themselves. If someone makes up a word, you should be charged for using it? You are retarded.

Now all of a sudden you're defending the restriction and ban to use words as people please?

Does somebody own the words "I have gold and this paper represents it redeemable" that only he can use?

Calling it fraud, making it illegal, completely disrespectful of voluntary contracts.

I'll make it easier for you, OBVIOUSLY you understand that when somebody uses a set of words, it communicates a meaning.

We ASSUME when somebody says "I will hurt you" they mean it, and it's a threat, not just a use of words. Similarly, you don't take "I have money for you" lightly, you expect it to be true, and similarly, if I don't credit you for something you composed of with your brain, it's misrepresenting it as my own (plagiarism). All these are indications that use of words are not as simple as use of words, they have results, meanings and uses/misuses.

In your world, I'm guessing you'd make it illegal or punishable to say "I have money" unless it's true, render fictional works what?? What about jokes? What about figurative speech? What about wrongly interpreted information? Miscommunication?

Must everything be literally true or otherwise fraud?

 

[Carson]

Snip...

I've been very disappointed with the defenders of forced full reserve banking in this thread. Besides not knowing what the act of defrauding requires, they haven't explained who is going to enforce the reserve requirements, they haven't explained the free-market existence of other similar systems such as insurance where parties agree to contacts with the understanding of the risk that there is not enough cash backing all the potential liabilities if claimed at the exact same time, and they haven't explained the success of free-banking in Scottland.

I think true fractional banking as it was meant as in the original posters comment:

"A. Taking $10 in, lending $9, keeping only $1.
vs. "

I don't think many have a problem with this as it leaves enough money to cover for withdrawals. It also allows banks to work together and pool their reserves if there is a run on one of the banks.

I think it is this one from the original poster that freaks them out;

"B. Taking $10 in, claiming to have $100, and lending out $90.
vs. "

This seems to be a bastardized variation of the definition of fraction banking. A bank borrows money, from say the Federal Reserve in the amount of 1,000 but lends out 10,000.

I'm not really sure how any bank could justify this as to me is seems a clear fraud. It is like a broker selling ten thousands shares of a stock in a company that has issued only one thousand shares.

It is obscene enough that the Federal Reserve is creating fake money to lend and especially when the government uses them as our credit card and stiffs us with the bill. I'm surprised they even have listed numbers for us to call, and it's sure no surprise that when we do, they don't listen. They have our credit card!!!

Our maxed out credit card.

 

[Conza88]

For somebody who said

He owns the paper the words are printed on, but he doesn't own the words themselves. If someone makes up a word, you should be charged for using it? You are retarded.

Go quote what I actually said, in context. That'd be the intellectually honest thing to do.

Now all of a sudden you're defending the restriction and ban to use words as people please?

No. That is a strawman and consequently everything you said after that is thus bullshit.

 

[Optatron]

I think true fractional banking as it was meant as in the original posters comment:

"A. Taking $10 in, lending $9, keeping only $1.
vs. "

I don't think many have a problem with this as it leaves enough money to cover for withdrawals. It also allows banks to work together and pool their reserves if there is a run on one of the banks.

Yeah, no normal person has a problem with it, only nutjobs who support Ron Paul and think the banks are all fraudsters have a problem

I think it is this one from the original poster that freaks them out;

"B. Taking $10 in, claiming to have $100, and lending out $90.
vs. "

This seems to be a bastardized variation of the definition of fraction banking. A bank borrows money, from say the Federal Reserve in the amount of 1,000 but lends out 10,000.

No, it was an example of what is NOT TRUE, BUT MISUNDERSTOOD AS TRUE.

 

[Optatron]

Go quote what I actually said, in context. That'd be the intellectually honest thing to do.

No. That is a strawman and consequently everything you said after that is thus bullshit.

you were saying IP doesn't exist, isn't property, isn't scarce.

So a person shouldn't be charged for using what isn't owned or isn't scarce.

I agree!

Then why should there be a problem with a person saying he owns money to lend when he doesn't? Does somebody own these words? What's he violating? Do you have a right to be told 100% truth?

 

[Conza88]

you were saying IP doesn't exist, isn't property, isn't scarce.

So a person shouldn't be charged for using what isn't owned or isn't scarce.

I agree!

Close. But again, you're twisting what was said. Go quote me, and in context.

Then why should there be a problem with a person saying he owns money to lend when he doesn't? Does somebody own these words? What's he violating? Do you have a right to be told 100% truth?

Nothing wrong with saying that. There is no threat of an initiation of violence. It is when that person attempts to enter into a contract, and there is fraudulent misrepresentation (property that is not backed by anything). Violate property rights.

You have a right to property. You can do what you want with it. But as per previous examples / scenarios you've attempted to indirectly make a case for FRB, it always falls flat on it's face - because they aren't analogous, the example ain't actually synonymous with FRB.

 

[Optatron]

Close. But again, you're twisting what was said. Go quote me, and in context.

Nothing wrong with saying that. There is no threat of an initiation of violence. It is when that person attempts to enter into a contract, and there is fraudulent misrepresentation (property that is not backed by anything). Violate property rights.

Whose property is being violated if I said I have money I don't have?

You have a right to property. You can do what you want with it. But as per previous examples / scenarios you've attempted to indirectly make a case for FRB, it always falls flat on it's face - because they aren't analogous, the example ain't actually synonymous with FRB.

its a matter of 2 people agreeing what they want are happy with, you disrespect it and want to make it illegal and punishable?

 

[Bman]

property that is not backed by anything

I'm confused what do you mean by property that is not backed by anything. What rules of backing are you talking about and, honestly don't freak out, how are the rules enforced.

I mean if people forge contracts to participate in fractional reserve banking what's to stop them. They all agreed.

 

[Optatron]

I'm confused what do you mean by property that is not backed by anything. What rules of backing are you talking about and, honestly don't freak out, how are the rules enforced.

I mean if people forge contracts to participate in fractional reserve banking what's to stop them. They all agreed.

he doesn't believe you have the freedom to talk shit, you should be punished for saying something that doesn't represent the truth in 100%, even if you and your partner agreed and know what each other mean.

 

[Conza88]

Whose property is being violated if I said I have money I don't have?

You can say what you want retard, as long as it isn't a threat of initiation of violence.

its a matter of 2 people agreeing what they want are happy with, you disrespect it and want to make it illegal and punishable?

Wrong. The scenario's you have given previously involve an exchange of a piece of paper (which you stipulated was not represented as money), there is no demand deposit involved, no nothing to do with a bank.. just an isolated instance of barter exchange. I previously said there is nothing wrong with that (person property i.e piece of paper *which is not money, a pseudo receipt, a fraudulent piece of bullshit scrip, something that is not backed up 100%, something that was created out of thin air* for said property)

Again, you are too retarded to make the distinction that what you propose is not FRB at all. Epic fail.

 

[Conza88]

I'm confused what do you mean by property that is not backed by anything. What rules of backing are you talking about and, honestly don't freak out, how are the rules enforced.

I mean if people forge contracts to participate in fractional reserve banking what's to stop them. They all agreed.

[17][/B]Fraud is implicit theft, since it means that a contract has not been completed after the value has been received. In short, if A sells B a box labeled "corn flakes" and it turns out to be straw upon opening, A's fraud is really theft of B's property. Similarly, the issue of warehouse receipts for non-existent goods, identical with genuine receipts, is fraud upon those who possess claims to non-existent property. - What has the Government Done to Our Money? by Murray N. Rothbard

Representing more property, than there actually is = Fraud, and thus implicit theft. See the non government counterfeiting chapter 14, of Defending the Undefendable.. it ideals with what you are talking about. FRB = Fraud. You move the goal posts and post something that isn't actually FRB and try make the case for it. Fail.