Some Fed shill defending fractional reserve banking (surprise) anyone got a response?

[Freshwater]

http://andolfatto.blogspot.com/2011/09/fractional-reserve-banking.html

Some others have already chimed in, i'll probably do so later too.

 

[Seraphim]

Fractional reserve banking is fine so long as the government and it's central bank do not provide a fradulent back drop to bail out the ones that go bankrupt after extending themselves by over leveraging. Of course, this backdrop is on the backs of the taxpayers, increasing said fraud.

If the FRB are left to float on their own, they will not extend themselves as much and play a key role in economic growth. Good ones thrive, bad ones go bankrupt.

 

[cubical]

I am fine with fractional reserve banking on its own. When it is backed by banking cronies, I have a problem.

 

[dennis dujac]

how would a full-reserve bank compete with a normal bank?

 

[Seraphim]

Less risk of credit collapse, safer investments, long standing growth...these are CORRELATIONS, not a widespread IT WILL BE LIKE THAT.

how would a full-reserve bank compete with a normal bank?

 

[dennis dujac]

Less risk of credit collapse, safer investments, long standing growth...these are CORRELATIONS, not a widespread IT WILL BE LIKE THAT.

i asked a different question than you answered, "how would a full-reserve bank compete with a normal bank?"



but yea, i think there would probably be less of everything, if fractional reserve banking was illegal

less risk, fewer profits, scant investment, smaller markets, insufficient production, meager growth and etc

nothing ventured, nothing gained

 

[Seraphim]

I answered your question.

If you want more information, define what a "normal" bank is.

I know the answer that you will give (fractional reserve) - my answer remains. A full reserve bank competes by offerering safer products and safer credit.

A FRB that extends itself is subject to mass liquidation to cover margins, which colllapses the credit it gives and thus the currency it issues as backing to the credit.

i asked a different question than you answered, "how would a full-reserve bank compete with a normal bank?"



but yea, i think there would probably be less of everything, if fractional reserve banking was illegal

less risk, fewer profits, scant investment, smaller markets, insufficient production, meager growth and etc

nothing ventured, nothing gained

 

[dennis dujac]

A full reserve bank competes by offerering saver products and safer credit.

where does a full-reserve bank get funds to loan?

 

[Seraphim]

Anyway that it's clients deem acceptable.

Full reserve banks are DEPOSIT banks generally - they would generally need a seperate division for loans and investments.

where does a full-reserve bank get funds to loan?

 

[dennis dujac]

Anyway that it's clients deem acceptable.

Full reserve banks are DEPOSIT banks generally - they would generally need a seperate division for loans and investments.

customers probably won't like having to pay for the service of holding their deposit in the full reserve bank

and the bank can't lend that money, by definition, it's required to hold the full amount of that deposit in reserve


please, give me an example of how such a bank would procure funds to loan out

 

[Diurdi]

how would a full-reserve bank compete with a normal bank?

If you mean a deposit bank, it competes by providing 100% safety but no returns. You pay for them to store your money and make it available for you for transactions (debit cars etc).

 

[Diurdi]

please, give me an example of how such a bank would procure funds to loan out

They could obviously only lend out from the profits they make from the customers. They probably wouldn't participate in lending at all.

 

[Seraphim]

Anyway that it's clients deem acceptable.

Full reserve banks are DEPOSIT banks generally - they would generally need a seperate division for loans and investments.[/QUOTE]

Full reserve banks are not in the business of aggressively lending.

 

[Bossobass]

The problem is not so much fractional reserve lending as it is that a CB is permitted to print money at will, backed by nothing, set interest rates, lend a countries money to whomever they wish, charge a country higher interest to 'borrow' its own money than they charge their friends and to be able to do all of that in a Constitutional Republic of checks and balances with ABSOLUTELY NO OVERSIGHT.

Since we've all accepted a system where money is everything, even more important than human life (let's face it, the MSM news reports financial data every day, 1.000 times a day, but never tells you how many children starved to death for lack of money), the penalties for fraud and theft of a countries money should be death by a thousand paper cuts on prime time TV.

Bosso

 

[dannno]

i asked a different question than you answered, "how would a full-reserve bank compete with a normal bank?"



but yea, i think there would probably be less of everything, if fractional reserve banking was illegal

less risk, fewer profits, scant investment, smaller markets, insufficient production, meager growth and etc

nothing ventured, nothing gained

No, investment would equal savings and there would be more savings and less mal investment.

 

[matt0611]

They could obviously only lend out from the profits they make from the customers. They probably wouldn't participate in lending at all.

Or they could offer savings accounts in which they loan out and deposit accounts in which they do not loan out but simply charge a yearly fee or whatever.

I think fractional reserve banking should just be outlawed as fraud. That will get rid of so many problems.

We should just go to 100% backed currency and 100% reserve banking IMO.

 

[dennis dujac]

If you mean a deposit bank, it competes by providing 100% safety but no returns. You pay for them to store your money and make it available for you for transactions (debit cars etc).

that's my point, a deposit bank could only compete if fractional reserve lending is not allowed

we would likely go back to a level of commerce like that of the 18th century

investment would equal savings…

i don't see how, 100% of the savings is sitting in the bank, not being invested

 

[matt0611]

i don't see how, 100% of the savings is sitting in the bank, not being invested

Ever heard of savings or certificate of deposit accounts?

 

[Travlyr]

The problem is not so much fractional reserve lending as it is that a CB is permitted to print money at will, backed by nothing, set interest rates, lend a countries money to whomever they wish, charge a country higher interest to 'borrow' its own money than they charge their friends and to be able to do all of that in a Constitutional Republic of checks and balances with ABSOLUTELY NO OVERSIGHT.

Since we've all accepted a system where money is everything, even more important than human life (let's face it, the MSM news reports financial data every day, 1.000 times a day, but never tells you how many children starved to death for lack of money), the penalties for fraud and theft of a countries money should be death by a thousand paper cuts on prime time TV.

Bosso

+rep for this ^^^.

There is so much poverty, death, and destruction because the central bank cartels are cheating people with their counterfeit money. Their media shill accomplices should pay the price as well.

 

[dennis dujac]

Ever heard of savings or certificate of deposit accounts?

yes, what's your point?