I know that he says the market determines interest rates and that he follows Hayek (a supporter of FRB), but I don't know if he's Rothbardian or Hayekian on FRB.
I was under the impression that he believed FRB should be legal, but I don't know for sure so that's why I am asking. I was thinking that he supported it because of the above mentioned reasons, and the fact that I've never heard him justify getting rid of the Fed by saying "if banks weren't allowed to loan peoples' depostis, then a central bank isn't necessary".
OTOH, he voted against repeal of Glass-Stegall.
From what I understand, Ron Paul supports the idea of free banking. Depending on who you ask, free banking can mean that fractional-reserve banking is either legal or illegal (the latter due to court precedent). In the event that it's legal, it's still riskier due to the increased risk of bank runs. Some people, and Dr. Paul might be one of them, think that the threat of bank runs will be enough to keep (most) banks "honest".
With that said, I don't think Dr. Paul is opposed to a 100% reserve requirement for the existing Federal Reserve as a transitional measure. However, I'm sure he realizes that, were such a requirement to be enacted overnight, it could have a catastrophic effect on the money supply and on the economy in general. If I were to guess, he'd probably support a gradualist "ratcheting-up" strategy w.r.t. the reserve requirement.
Regarding Glass-Steagall, I think Dr. Paul's reasoning is that, if the money supply is not restricted by market mechanisms, it can at least be restricted by political mechanisms. In other words, if (unfortunately) money and finance is based on a centrally-controlled fiat currency, placing some restrictions on money/credit creation is better than no restrictions at all.
The keyboard is mightier than the gun.
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Voluntaryism Forum
Two of Paul's three favorite economists understood that fractional reserve banking absolutely must be legal, and that it's socialist to try to ban them. Hopefully he's wise enough to listen to them.
There is no threat of runs on a modern fractional reserve bank, would not be even in a free market. This is because the marketplace solved that problem, privately, in 1907. Over the course of the previous two decades, the idea of a Lender of Last Resort acting as a sort of banking insurance company had evolved, out of private industry joining to head off bank runs. It was tried partially in the 1893 panic, and successfully in 1907.
Had the socialists not then set up the Fed as a monopoly, a series of competing, free market organizations would have come into being to do exactly what the Fed was initially described as doing...to deliver money to any bank suffering a "run", so that the depositors of ALL banks (covered) could feel confident that they'd always be able to get their money/gold, ergo runs would effectively vanish.
For the government to impose a reserve requirement higher than it does now would be foolish, and self-defeating. In fact, the Fed effectively upped its reserve requirements in 2008, by beginning to pay interest on "excess reserves"...and the result has been three years of economic stagnancy, as banks hoard money instead of lending it. This is a central cause to the "liquidity trap" the Fed has then turned around and pretended to "fix" with its quantitative easing.
See here for more on that:
http://butnowyouknow.wordpress.com/2010/12/28/is-the-fed-wagging-the-dog/
Kaz, you never answered my latest objections in the FRB thread you started.
I seem to remember an interview he did with The Young Turks where he said fractional reserve banking should be illegal.