tag:blogger.com,1999:blog-648884752216444797.post6796170784883950610..comments2024-03-28T09:59:13.754-07:00Comments on bionic mosquito: Austrian View of Fractional Reserve Banking: Tamny Mostly Right, Shedlock Mostly Wrongbionic mosquitohttp://www.blogger.com/profile/12002548958078731031noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-648884752216444797.post-7792608843892832462020-01-13T06:11:48.218-08:002020-01-13T06:11:48.218-08:00Much depends on the definition of fraud. If I offe...Much depends on the definition of fraud. If I offer a service or product that is dangerous to the consumer, and fail to ensure that the consumer is aware of the danger, is that fraud?<br /><br />By your implied definition, the answer is 'no' if the terms of a contract are upheld. In an alternate universe, a court might require of the vendor that he verify the consumer's understanding of the danger entailed by the product or service.<br /><br />Bailment accounts in precious metals do exist. I know of no bank, however, that offers bailment accounts in cash. I suspect the reasons are several. One is: the central banks "print" money at such a rate, one would ordinarily take a substantial loss over time in the value of one's deposit. The other reason may be regulatory.<br /><br />A safer system of lending would limit lending of money belonging to the shareholders of a bank. An individual could buy shares as an investment, or put his money into a bailment account.<br /><br />I agree, however, that in a laissez-faire system sans central banks and govt. interference, one shouldn't denounce fractional-reserve banking as fraudulent -- unless one's society adopts the more stringent definition of fraud.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-64467073505979963512017-09-08T15:48:42.345-07:002017-09-08T15:48:42.345-07:00"The profits come from borrowing at one rate ..."The profits come from borrowing at one rate of interest, then lending longer term at a higher rate."<br /><br />This, of course, is nonsense.A banks profits come largely due to the ability to create money cost free and lend it at a premium.<br />It has nothing to do with their depositors funds costs.Bilejoneshttps://www.blogger.com/profile/15426920337506809987noreply@blogger.com