Hey guys I recently watched a movie called "Maxed out". It was pretty interesting. However it really shook my faith in markets. My question is without fiat currency and central banking, would shadow banking arise? Or are they a result of easy credit from the fed? Also predatory lending can take a great deal of fraud. Some people aren't completly aware of what they are getting themselves into with mortages on apr, and credit card debt. Also should people still be able to declare bankrupcy? This would add more risk to lenders and prevent them from lax lending as much.
Matt:Hey guys I recently watched a movie called "Maxed out". It was pretty interesting. However it really shook my faith in markets.
One movie shook your faith in markets? That is sad. Did you ever trust in them to begin with?
Matt:My question is without fiat currency and central banking, would shadow banking arise? Or are they a result of easy credit from the fed?
It is really hard to say what our financial system would look like in a free market.
Matt:Also predatory lending can take a great deal of fraud. Some people aren't completly aware of what they are getting themselves into with mortages on apr, and credit card debt.
As such, in a free market, the institutions that would do best would be those that were up front with their customers, if customers really cared.
Matt:Also should people still be able to declare bankrupcy?
Probably. http://mises.org/story/3154
Matt:This would add more risk to lenders and prevent them from lax lending as much.
It does not really add that much risk. Declaring bankruptcy makes it extremely difficult for the person declaring it to get more funding.
At most, I think only 5% of the adult population would need to stop cooperating to have real change.