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Normal 0 false false false EN-AU X-NONE X-NONE MicrosoftInternetExplorer4 Can anyone provide a citation that supports the statement by Hans F. Semholz posted at http://mises.org/story/2414# that Friedman “calls for the issue of government money in the form of non-interest bearing obligations that...
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I was listening to Peter Schiff, and I heard him say that you don't have to give up a fractional reserve system as long as you tie it to gold. However, I thought you would want a 100% reserve currency because otherwise the money supply could still change based on the amount of credit in the system...
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Central banks perform a number of functions; basically they act as the government's own bank, holding the government checking accounts and collecting tax receipts, facilitating the issuance of bonds, etc. They are also frequently given regulatory functions, such as the enforcement of fractional reserves...
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[quote user="confuse a cat"] I've accepted worthless pieces of paper all my life. I never questioned for 32 years whether notes really represented anything, yet it didn't stop me valuing this paper and desiring it more than gold for which i have no use. To me my money is just information...
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[quote user="confuse a cat"] Incidentally i have never understood what currency represents. If you gave me a gold bar, i'd only have appreciated it in terms of how many paper squares it got me Perhaps i have misunderstood you, but if a 'non backed' bank note represents a future...
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[quote user="meambobbo"] hjmaiere, is this what you are saying: If we trade debt (bank notes) as though it were money, then its being used for exchange in addition to the money it represents being used in exchange, there is increased demand and increased prices? If the debt is being used for...
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[quote user="meambobbo"] [...] To me it seems that fractional-reserve banking is simply whenever a bank owes its depositors more money on demand than is available. But this isn't inflationary if the bank is not creating claims to wealth it does not and never had. If the bank is simply lending...
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[quote user="Juan"] [...] Now FRB seems to be a mix of the two. But does such a system make sense ? Under FRB, deposits are contractually available on demand, BUT there's a very real chance that they will 'magically' morph into timed deposits. If the bank keeps 50% of reserves,...
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[quote user="meambobbo"] Unbacked bank notes is not the same thing as FRB, in my mind. [...] [/quote] You're just trying to redefine what it means for a bank note to be 'backed.' Fractional-reserve bank notes are bank notes that are supposed to be redeemable on demand, but are only...
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[quote user="meambobbo"] [...] If I put 1 oz of gold in the bank, and they lend out .5 oz, that's fractional reserve banking, but they're using real wealth to make their loans. [...] [/quote] Whether this is fractional-reserve banking depends entirely on the piece of paper they hand...