https://archive.freecapitalists.org:443/forums/5.aspxenCommunityServer 2008.5 SP2 (Build: 40407.4157)https://archive.freecapitalists.org:443/forums/thread/149287.aspxThu, 14 May 2009 14:55:37 GMT944abf2b-d1be-4bf2-990d-438cb0e377e9:149287S.N.P0https://archive.freecapitalists.org:443/forums/thread/149287.aspxhttps://archive.freecapitalists.org:443/forums/commentrss.aspx?SectionID=5&PostID=149287<p>Since non-clients won&#39;t accept the money-substitues, or if they do, will make good on the claim and trade them in for gold immediately, the bank must have that proportion of exchanges that its clients makes with non-clients in reserve. If everyone was a client of the same bank, that bank could in theory have a 0% reserve since no-one would have any need of the actual money (ignoring any industrial uses of the money).</p><div style="clear:both;"></div>https://archive.freecapitalists.org:443/forums/thread/149271.aspxThu, 14 May 2009 13:47:17 GMT944abf2b-d1be-4bf2-990d-438cb0e377e9:149271Prashanth Perumal0https://archive.freecapitalists.org:443/forums/thread/149271.aspxhttps://archive.freecapitalists.org:443/forums/commentrss.aspx?SectionID=5&PostID=149271<p>I found these lines in Mises&#39; Human Action: &quot;A bank can never issue more money-substitutes than its clients can keep<br />in their cash holdings. The individual client can never keep a larger portion<br />of his total cash holding in money-substitutes than that corresponding to the<br />proportion which his turnover with other clients of his bank bears to his total<br />turnover.&quot;</p> <p>What does Mises mean? Do help me!</p><div style="clear:both;"></div>