Lending Club
"By allowing our members to directly invest in and borrow from each other, we avoid the cost and complexity of the banking system and pass the savings on to you. Both sides can win: better rates to borrowers and better returns to investors. It's that simple."
Could a "free" banker explain the necessity or desirability of fractional reserves or even "banks" as we now them, again, please?
Also,
prosper.com and
zopa.com
what exactly is the reserve, fiat currency?
My Blog: http://www.anarchico.net/
Production is 'anarchistic' - Ludwig von Mises
very nice information sharing with us and thanks for it
Isaac "Izzy" Marmolejo: what exactly is the reserve, fiat currency?
Well currently banks practice fractional reserve banking on top of the same fiat currency as "reserves".
With these outfits, there's no "reserve", just like there's no "bank". Simply investors supplying their saved X to borrowers that demand it via a middleman (Lending Club) that charges both for the service. X could be anything, and it just so happens to be the current legal tender which is fiat currency. X could as easily be gold bullion. The point, shown in action, is that no pyramiding (fractional reserve) is done/needed for savers to meet with borrowers.
you are setting up a straw man because there are vast differences in the way the central banks run and how free banking FRB run. This almost reminds me when socialists try to critique capitalism but instead forget to realize that state capitalism and free market capitalism are completely different in the way its ran.
also there is no pyramid scheme going on in free banking
Isaac "Izzy" Marmolejo: you are setting up a straw man because there are vast differences in the way the central banks run and how free banking FRB run.
you are setting up a straw man because there are vast differences in the way the central banks run and how free banking FRB run.
Leaving the debate about fraud aside, what I am showing to be unnecessary is fractional reserve banking which proponents of "free" banking predict would be the prevalent mode by which savers meet borrowers in a free market. I, on the other hand, predict that with advances in technology both "banks" and "fractional reserves" would die off like dinosaurs. Savers need borrowers, and borrowers need savers. A profit opportunity exists for middlemen like Lending Club to provide a venue for voluntary exchange between the two -- without any conflicting claims to property/capital.
I could never argue with this. This is true and wise.
so does it store the money for you?
Isaac "Izzy" Marmolejo: so does it store the money for you?
Are you referring to the money that you just lent/invested?
im just trying to figure out how this is a representative of 100% reserve banking
I can help you with that. Answering my last question would be a good start.
yes that is what i am referring to. is it just storing your money or is it just transferring money from the bank A (lender's bank) to bank B (borrower's bank).
If the lender's (investor's) money is not (yet) lent out (invested) then, yes, it is stored as a 100% reserve deposit available to the lender at any time. If/when it does get lent out (invested) to a borrower then it is not "stored", simply because it is not there any more, i.e. not available to the lender. Accounts in Bank A and Bank B -- as a possible source of and destination for the capital/money -- are irrelevant. Without any loss of generality, the lender could as easily deposit and lend (invest) cash (or gold bullion) taken out of his mattress and the borrower could take delivery of the same cash (bullion) without any involvement of Bank A or Bank B.