tag:blogger.com,1999:blog-648884752216444797.post7701207046108331656..comments2024-03-22T17:43:18.211-07:00Comments on bionic mosquito: Selgin and Salerno on Free Bankingbionic mosquitohttp://www.blogger.com/profile/12002548958078731031noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-648884752216444797.post-77923291802197775762015-08-04T15:17:54.821-07:002015-08-04T15:17:54.821-07:00Igor, it is clear and the contract language was of...Igor, it is clear and the contract language was offered to you already. Second, it isn't all risk and no reward. If you don't like the reward, you are free to deal only in cash.<br /><br />Finally: "The bank is not negotiating in good faith when they promise to make money available to me on demand, knowing that they cannot."<br /><br />Again, you seem to ignore the plain language in the above. But I will accept that you believe contracts don't matter: 99.9999% of the time, banks make good on this so-called promise. Please tell me in what industry you will find a better record of performance?<br /><br />You ignore plain language and you make statements unsupported by facts.bionic mosquitohttps://www.blogger.com/profile/12002548958078731031noreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-24765671827101458222015-08-04T10:43:21.004-07:002015-08-04T10:43:21.004-07:00Bankruptcy is not theft..?
You're saying, I t...Bankruptcy is not theft..?<br /><br />You're saying, I think, that a checking account is a lousy deal but not a crime. All risk, little to no reward. But I'm saying that it is a contract, and as such has to be negotiated in good faith by all parties. The bank is not negotiating in good faith when they promise to make money available to me on demand, knowing that they cannot.<br /><br />All I'm asking is that they make it clear that, just as with a CD, the depositor's money will be invested and will not necessarily be available for withdrawal.<br /><br />A borrower in general does so with the intention to repay the loan. The bank does not. The lender makes the loan only with the understanding that the borrower will pay. I'm no lawyer, but if the borrower takes out a loan fully intending to default on it, I think this should be called theft. Practically speaking, the court would nullify the contract and restore the parties to the original state: the bank would have to repay the loan in other words.<br /><br />Igor KarbinovskiyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-74031106339171656382015-08-03T11:08:37.231-07:002015-08-03T11:08:37.231-07:00"...in what way is this not theft?"
It ..."...in what way is this not theft?"<br /><br />It is not theft because it is bankruptcy. Perhaps a moral issue, but certainly not a legal one. <br /><br />You extend credit. What do you think, this is done without risk? On what planet?bionic mosquitohttps://www.blogger.com/profile/12002548958078731031noreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-63172725572964423112015-08-03T10:15:51.636-07:002015-08-03T10:15:51.636-07:00Anon, thanks for that. However, even if I'm co...Anon, thanks for that. However, even if I'm considered a creditor of the bank, it's a credit with zero maturity. In other words, I can call it at any time and they'd be obligated to pay. And yet they are not able to do so, and they know it. <br /><br />If I enter into a contract with Mr Mosquito as a borrower, and affirm that I will pay him back on demand, but then turn around and walk away with it so that it is not possible for him to collect, in what way is this not theft?<br /><br />So I believe that merely putting those words into the contract does not, in fact, shield them from criminal liability.<br /><br />Igor KarbinovskiyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-92159254804953653762015-08-01T23:29:31.398-07:002015-08-01T23:29:31.398-07:00If the Catholic church where intelectually consist...If the Catholic church where intelectually consistent, What position would take in this debate?<br /><br />Personally, I believe the Church would claim they should control all the banking, and would invento something to justify that. Governments do the same thing, and they all copy the Church model of aspiration to absolute control of everything under the Sun. Somehow, people seem to believe such intentions are evil from religious organizations, but not evil at all when coming from "secular" organizations. Fools.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-49449024720460701162015-07-31T12:23:26.511-07:002015-07-31T12:23:26.511-07:00Anon,
It's always been a false paradigm world...Anon,<br /><br />It's always been a false paradigm world. Power corrupts and people continue to acquiesce to the concentration of power that they will never (without selling their souls to the devil) acquire the levers to control. Liberty or security is a spectrum upon which the closer you get to one, the further you get from the other. The banks provide a clearing house for government expenditures to grow without end and thus are a greater asset to those in government than individuals who wish contracts to legally bind parties to the same degree and magnitude. Knowledge of the world seems is important for human action but truth of the universe will not be found in the laws of men. alaska3636noreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-27190131070335117342015-07-30T10:11:42.752-07:002015-07-30T10:11:42.752-07:00@Igor
I found the Citibank contract online, they ...@Igor<br /><br />I found the Citibank contract online, they call it "Client Manual: Consumer Accounts."<br /><br />The pertinent element in it I saw was: "Unless otherwise expressly agreed in writing, our relationship with you will be that of debtor and creditor. That is, we owe you the amount of your deposit. No fiduciary, quasi-fiduciary or other special relationship exists between you and us."<br /><br />I'll admit, this is craftily written to cover their tail. It says when customers deposit money in a savings account with them, they are not holding the money for us. Instead, we transfer full ownership of the money to them. We are loaning the money to them. Thus they can turn around and do anything they want with it. They can behave as irresponsibly as they want with the money because it's not ours, it's theirs and they have no fiduciary duty toward us (funny thing for a bank to say).<br /><br />So we've established their legalese covers their tail. No surprise since their lawyers at corporate headquarters certainly understand how the Federal Reserve Act works, even if their branch employees and customers don’t. I'd say the fact that 99.999% of the population (including me until just now) does not understand that a savings account is legally a loan to a bank, and would insist that's not true, suggests banks and the government have taken great pains to misrepresent what a savings account is in their words, marketing materials, and educational programs trusting few people have PhD's in economics or reads the fine print of these contracts. <br /><br />I still think there is a case for fraud here. In any other sphere failure to prominently disclose a fact so glaringly contrary to common wisdom would be considered fraud. For example, a restaurant not prominently disclosing in advance that its menu prices are not denominated in U.S. dollars but in ounces of gold could be considered to be committing fraud, so contrary to commonly understood practice is that contract term.<br /><br />- Anonymous July 30, 2015 at 7:33 AMAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-12927788700987732842015-07-30T09:31:10.054-07:002015-07-30T09:31:10.054-07:0055 posts, I suggest you all start reading. Read t...55 posts, I suggest you all start reading. Read the comments as well. Your questions and criticisms have all been dealt with numerous times.bionic mosquitohttps://www.blogger.com/profile/12002548958078731031noreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-33761469384926342612015-07-30T08:41:47.029-07:002015-07-30T08:41:47.029-07:00No? What does it say? Does it say that if they don...No? What does it say? Does it say that if they don't have the money to pay me, they have the de jure right to refuse my withdrawal request? I'm not trying to be clever, I really don't know. I tried looking at something from Chase I found online but can't find anything one way or another.<br /><br />Last I heard, checking accounts were "demand deposits" and banks were required to honor such demands, subject to reasonable time constraints for large cash withdrawals. Is that not correct?<br /><br />Igor KarbinovskiyAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-91820856190458522072015-07-30T08:19:46.451-07:002015-07-30T08:19:46.451-07:00@BM
"This is not what the contract says.&quo...@BM<br /><br />"This is not what the contract says."<br /><br />Really? So modern day banks do not hold out to the public that savings account balances are demand deposits, payable in cash at any time on demand? If I asked a bank teller or any bank employee this I think they would say, "Of course you can always withdraw your money."<br /><br />If I insisted, saying, "I heard you are only able to redeem up to 10% of deposits. I heard beyond that you have no more money to pay the remaining 90% of depositors money, and they are out of luck," I'm pretty sure the bank employees would say, "Huh? What the hell are you talking about? If you deposit money with us, you can withdraw it. What kind of bank would we be if that weren't true."<br /><br />- Anonymous July 30, 2015 at 7:33 AMAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-49432131801566567752015-07-30T07:53:45.820-07:002015-07-30T07:53:45.820-07:00"The bank entered into a contract with me whi..."The bank entered into a contract with me which stipulates that they will keep my money safe and will return it to me - this is critical - on demand."<br /><br />This is not what the contract says.bionic mosquitohttps://www.blogger.com/profile/12002548958078731031noreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-19770081198212985012015-07-30T07:47:56.737-07:002015-07-30T07:47:56.737-07:00I'll do that, thanks. That's quite a bit o...I'll do that, thanks. That's quite a bit of reading, but I'll go through it. <br /><br />Just to clarify what I meant, though, maybe I should have said "theft" rather than "fraud". The bank entered into a contract with me which stipulates that they will keep my money safe and will return it to me - this is critical - on demand. Then they took that money and lent it out, meaning that it is no longer possible for them to fulfill the contract's terms. The note they have on their books is not collateral - I cannot seize the note in lieu of cash owed me. I say that means they stole that money from me.<br /><br />Maybe I'll register so you can keep track of my posts. Hopefully we can keep our discussions cordial.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-53802434389817635902015-07-30T07:33:50.495-07:002015-07-30T07:33:50.495-07:00BM is right elsewhere when he points out fractiona...BM is right elsewhere when he points out fractional reserve banking is not fraud if fully disclosed as such. That is, in exchange for depositing money, one is given not a warehouse receipt, but a claim check on that money explicitly labeled to be in competition with other claim checks for that very same money. Obviously, one would need to be paid interest for giving up an exclusive claim on money, and one would need to know the terms and conditions by which competing claims were settled including underlying risks of default on the loaned out money.<br /><br />The beauty of this is that in no uncertain terms the claim one holds would never trade on par with actual money. It would be valued for trade in goods and services only after applying a discount for the probability of it not being redeemable. Turns out, lo and behold, that discount would (approximately) match the actual chances of redeemability such that the net money supply would not be altered in any way.<br /><br />No fraud here. No inflation of money supply here.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-8687774222769639282015-07-30T06:46:01.935-07:002015-07-30T06:46:01.935-07:00“Where do you stand on fraud as a violation of NAP...“Where do you stand on fraud as a violation of NAP?”<br /><br />Fraud is a very squishy term. Is advertising for makeup “fraud”? Is there any hope that I will look anything like that athlete with the six-pack abs if I buy the protein drink? Where do you draw the line?<br /><br />Define fraud in a black and white manner. It can’t be done. The best I can do is via the terms of a contract (implicit or explicit) – a violation of the terms of a contract. This is reasonably straightforward.<br /><br />Fraud is not a very meaningful term for the use of identifying an NAP violation.<br /><br />“Fractional reserve banking is fraud…”<br /><br />Hold it right there, cowboy. Read all of these, then let me know (don’t worry, there are only 55 posts that I have written on the matter). Until then, I am not buying what you are selling….and you need not do your preaching here.<br /><br />http://bionicmosquito.blogspot.com/search/label/fractional%20reserve%20banking <br />bionic mosquitohttps://www.blogger.com/profile/12002548958078731031noreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-53069002620058911252015-07-29T07:20:24.151-07:002015-07-29T07:20:24.151-07:00Where do you stand on fraud as a violation of NAP?...Where do you stand on fraud as a violation of NAP? Fractional reserve banking is fraud - issuing claims on cash which does not exist. Your typical savings (as opposed to investment) bank promises to return a depositor's money but is not able to actually deliver on this contractual obligation. All such banks are constantly bankrupt. Knowingly making false statements and impossible promises to your customers is fraud.<br /><br />It's true that bankruptcy, when it comes to light, will be its own punishment, but I do think that this sort of fraud requires criminal penalties, as well. Wouldn't you say?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-3414384678260540522015-07-28T17:04:24.292-07:002015-07-28T17:04:24.292-07:00"Great economists like Mises indirectly deliv..."Great economists like Mises indirectly deliver untold advantage for the cause of non-aggression and freedom in their Herculean efforts exhaustively describing the actual laws of economic reality."<br /><br />And we are all in their debt (figuratively, of course) because of such efforts.bionic mosquitohttps://www.blogger.com/profile/12002548958078731031noreply@blogger.comtag:blogger.com,1999:blog-648884752216444797.post-17649609910002722442015-07-28T14:04:15.740-07:002015-07-28T14:04:15.740-07:00Austrian economics is just recognizing free market...Austrian economics is just recognizing free market dynamics also apply to money. Summarized with something like, "Supply and demand drive everything. Counterfeiting distorts." <br /><br />BM: "...as long as two or more people are gathered in whatever name – and they do not initiate aggression against a third party – they are free to contract in any manner they choose....I don’t care about business cycles; these are all issues for entrepreneurs in the free market to deal with. It’s called life. Competition, pricing, and profit and loss will send the necessary signals and separate the profitable wheat from the loss-making chaff."<br /><br />Correct and properly deontological. But somewhat unkind and underappreciative of how the careful study of free markets gives rise to adoption of non-aggression in the context of how human psychology operates.<br /><br />Practically speaking, how did you arrive at your position of absolute understanding and respect for non-aggression? From birth? Don't answer that, you are probably unique. But most people grow up implicitly accepting at least some parts of their surrounding culture which presumes government coercion of free markets, especially money, to be necessary and valuable. This has to be unwound somehow.<br /><br />Thus it is perhaps sad, but also true, that far more often those arriving at non-aggression do so by backing into understanding its importance for success in life. They are intrigued by the superior outcomes to be had.<br /><br />Great economists like Mises indirectly deliver untold advantage for the cause of non-aggression and freedom in their Herculean efforts exhaustively describing the actual laws of economic reality. These reveal the economic and human devastation wrought by coercion. Yes, I know, I know, in theory such utilitarian considerations shouldn't matter, but to most people they very much do. If the practical economic nuts and bolts of how and why socialism causes mass starvation and devastation are made plain, people are more likely to seriously question the legitimacy of coercion compared to just reading an abstract philosophical treatise on its immorality.Anonymousnoreply@blogger.com