Hello,
(1) Did Rothbard support the gold standard over any other monetary system or did he support it as the best and most probable way to exit the current fiat money system?
(2) I understand why fractional reserve banking should be considered a crime since money is controlled by central banks. But, in a free-money system, wouldn't Rothbard say fractional reserve banking is not a crime but more a dummy business model that should not attract anybody?
Thanks for you answers
ClaytonB:Then, the question is whether individuals in a free market would contract with banks that only contract to "repay $x on demand" when their competitors across the street contract not only to repay on demand but to keep the deposits to be repaid on hand. I think the answer is obvious. Banks that keep deposits at full reserve status and offer certificates of deposit for interest-bearing accounts would wipe the floor against the duplicitous fractional-reserve types which would crash at every rumor of a bank run or panic.
Certificates of deposit for interest-bearing accounts are what the fractional-reserve banks would exchange, full reserve banks would exchange warehouse receipts, for a fee. Obviously, people prefer fees over interest.
in looking over a 'consumer account agreement' from wells fargo i dont even see the words demand deposit. i rememeber it from previous bank employment years ago.
there are just various reasons given for why a bank wouldnt quickly provide funds - large checks, out of state checks, new accounts etc.
it doesnt seem with wells fargo anyway that the demand deposit terminology is even used.
to the extent that a govt bank will provide the schlegal funds-on-demand requirement to meet a banks own deposit-contract i would call crooked and tyrannical...just to keep banks afloat and not my favorite taco stand for instance. if that actually happens.
maybe postings using demand deposit should refer only to those banks that still use the term demand deposit and not as a general rule.
but the rothbard and many at mises have called the 'inflation' an disease and an ill. i am still trying to figure out if that is true or not.
"to separate the government from
money; and (d) either to enforce 100 percent reserve banking on the commercial banks"
he or whoever the rothbard is shouldnt have said this or wrote poorly .
a few lines later th writer is advocating free banking schemes and saying "or at least" perhaps agitate for 100 percent reserves would have been more appropriate. did you get that?
if frb is a true phenomenon and a demand deposit still exists (probobly not common now though) then i guess as long as a bank was able to redeem cash or specie at one of its branches (bank property, iow) that to me anyway would still seem to legitimately meet the demand request.
but making so many posts concerning demand deposits if there are only account agreements now (not saying on demand, iow) doesnt make much sense though.
I am starting to think that Rothbard believes that fractional reserve banking is always fraudulent even in the case where there is free money (perfect world here) and that the contracts between the bank and the customers clearly explain that fractional reserve is employed.
Would not Rothbard argue that property rights trump contracts and that irrelevant of what the banks wrote in the contract and the customer agreed, this is is a fraud?
goviscrime: Would not Rothbard argue that property rights trump contracts
Would not Rothbard argue that property rights trump contracts
I certainly hope so. why you wouldn't? Can I contract with you to kill your neighbor?
goviscrime:I am starting to think that Rothbard believes
Don't think too much about what somebody else believes. Or even worse, learn about what he knows from his critics.
What have you read yet about this issue? Specifically, what writings of Rothbard have you read?
Angurse: ClaytonB:Then, the question is whether individuals in a free market would contract with banks that only contract to "repay $x on demand" when their competitors across the street contract not only to repay on demand but to keep the deposits to be repaid on hand. I think the answer is obvious. Banks that keep deposits at full reserve status and offer certificates of deposit for interest-bearing accounts would wipe the floor against the duplicitous fractional-reserve types which would crash at every rumor of a bank run or panic. Certificates of deposit for interest-bearing accounts are what the fractional-reserve banks would exchange, full reserve banks would exchange warehouse receipts, for a fee. Obviously, people prefer fees over interest.
Good and nice ownage.
Angurse: Certificates of deposit for interest-bearing accounts are what the fractional-reserve banks would exchange, full reserve banks would exchange warehouse receipts, for a fee.
Certificates of deposit for interest-bearing accounts are what the fractional-reserve banks would exchange, full reserve banks would exchange warehouse receipts, for a fee.
It is debatable if "Certificates of deposit for interest-bearing accounts" would constitute for what we call today fractional reserve banking , and whether such a system would evolve in the free market.
Angurse: Obviously, people prefer fees over interest.
Obviously, people prefer fees over interest.
False dichotomy. The preference is between holding a certain amount of cash reserves and lending out the money for investment.
If a man is increasing his cash holding, he's obviously forgoing investment with that amount and the interest he can earn on it. The uncertainly of investment is what drives the individual to hold a certain amount of cash. Since your "FRB" system (where all parties are informed of the terms) still bears the uncertainty of investment, it is not clear as to why you are so certain that interest would be preferred. In fact, the assertion is rather nonsensical.
DD5:It is debatable if "Certificates of deposit for interest-bearing accounts" would constitute for what we call today fractional reserve banking , and whether such a system would evolve in the free market.
It basically is, and it obviously evolved.
DD5: Since your "FRB" system (where all parties are informed of the terms) still bears the uncertainty of investment, it is not clear as to why you are so certain that interest would be preferred. In fact, the assertion is rather nonsensical.
They always did. There is no evidence to the contrary at all.
Don't care. The point was that such a thing would be impossible in a full-reserve bank.
DD5:False dichotomy. The preference is between holding a certain amount of cash reserves and lending out the money for investment.
Umm, no. It was presented within the context of warehouse vs. (free) banking, it doesn't have to take into account people who use neither.
DD5:If a man is increasing his cash holding, he's obviously forgoing investment with that amount and the interest he can earn on it. The uncertainly of investment is what drives the individual to hold a certain amount of cash. Since your "FRB" system (where all parties are informed of the terms) still bears the uncertainty of investment, it is not clear as to why you are so certain that interest would be preferred. In fact, the assertion is rather nonsensical.
All forms of investment bear uncertainty, anything with a contract bears uncertainty. Hardly nonsensical to think people would prefer extra money.
Angurse: DD5:If a man is increasing his cash holding, he's obviously forgoing investment with that amount and the interest he can earn on it. The uncertainly of investment is what drives the individual to hold a certain amount of cash. Since your "FRB" system (where all parties are informed of the terms) still bears the uncertainty of investment, it is not clear as to why you are so certain that interest would be preferred. In fact, the assertion is rather nonsensical. All forms of investment bear uncertainty, anything with a contract bears uncertainty. Hardly nonsensical to think people would prefer extra money.
Do you ever respond to the actual context of what people say? I have yet to encounter such an event.
You said "Obviously, people prefer fees over interest." (sarcasm implying the opposite), but you completely ignored the motives behind each preference; namely, investing vs holding. So your assertion is indeed nonsensical.
The vagueness, and lack of consistency on this difference is the hallmark of your theory. And as usual, you the need to conflate the two (holding cash and investing) for your assertions to sound correct.
scineram: DD5: Since your "FRB" system (where all parties are informed of the terms) still bears the uncertainty of investment, it is not clear as to why you are so certain that interest would be preferred. In fact, the assertion is rather nonsensical. They always did. There is no evidence to the contrary at all.
No evidence to what? That people want to hold a certain cash balance without investing it. Do you also respond without grasping the full context of what you are responding to?
scineram: DD5:It is debatable if "Certificates of deposit for interest-bearing accounts" would constitute for what we call today fractional reserve banking , and whether such a system would evolve in the free market. It basically is, and it obviously evolved.
The current system evolved as a result of government intervention.
As for historical examples, the few like "free banking is Scotland" were later discovered to be more myths then reality. At least you can acknowledge the controversy surrounding such few and rare examples instead of just making baseless assertions as if they were factually proven.
DD5:Do you ever respond to the actual context of what people say? I have yet to encounter such an event.
Already? Its only been two pages.
DD5:You said "Obviously, people prefer fees over interest." (sarcasm implying the opposite), but you completely ignored the motives behind each preference; namely, investing vs holding. So your assertion is indeed nonsensical.
No. I understand each preference. I'm saying people (in general) will prefer whichever costs them least (they want as much money as possible). Is that hard to understand? You on the other hand are saying "hey, wait, people have motives behind their preferences" I'm replying "no shit." I've already presented a motive, I have yet to hear why that motive is nonsensical.
DD5:The vagueness, and lack of consistency on this difference is the hallmark of your theory.
Back up your claims. What lack of consistency? What vagueness? What is my theory? (Please provide quotes)
DD5:And as usual, you the need to conflate the two (holding cash and investing) for your assertions to sound correct.
Umm no. If you are referring to a call-loan, it hardly conflates the two.
Cash holders hold cash. WTF does this have to do with deposits?
cash holders, i.e. gold holder, hold their cash/gold in vaults inside things called 'banks'. the act of storing the gold in the bank is knows as making a deposit with the bank.
you are familiar with the history of banking yes?
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring