Could this be the beginning of the end of Fractional Reserve Lending??? A major .....

[trendlover]

http://thoughtsfromthetrenches.blogspot.com/2008/06/weekly-report-23-june-2008.html

Scroll down in this link to (The Weekly Report)
For me this was a simple to read explanation with a simple 2 graphs for basic understanding of fiat and what is happening.

 

[Anaconda]

Quote from buzzy2:

Modern fractional reserve banking was basically invented by John Law, the 18th Century Bernie Madoff. He thought that financial pyramids (Ponzi games) did not necessarily had to go bust, rather, they could go on and on for a long time, if the promoters did not become too greedy.

Well the concept comes from goldsmiths and warehouse owners. It's ancient.

I'm not sure if it was John Law, but I do know there was a court case in the 18th century which essentially legalized fractional reserve banking as a practice. Prior to that, anyone caught playing the fractional reserve banking game was thrown into jail, or worse.

 

[Anaconda]

Quote from jordanf:

I know people who believe "fractional reserve banking" means that a fraction of the banks total deposits are kept at your local branch, and the rest is kept at some "main vault" somewhere. They have no idea what it actually means.

I know Investment Bankers who never even heard of the phrase "fractional reserve banking".

 

[fearless9]

Quote from Anaconda:

No, it's too late. There is no turning things around, at best, you level the whole system to the ground and rebuild. Either way, this whole financial system will crash, it's pretty much written in stone.

Yes I am with you Anaconda.
The system has imploded under it's own greed but nobody is prepared to admit it and so the 'forward into the past' line of thinking will continue until the point of collapse.

When I watch US TV all I see and hear are the cries for jobs jobs and jobs.As though this will fix the problem along will a home owners package.
'Let us approve this stimulus package and get America moving again' is the rally cry.
Donald Trump says' let us try one thing and if it doesn't work then try something else'... how stupid can you get.

Never ever have I heard ' who will buy the bonds now that it is obvious US cannot and will not meet it's borrowings'.

And so obviously, US TV is not asking the question 'if nobody buys the bonds what do we do next'

I spend six months of the year in Buenos Aires.
Why not put this question to them as they have had some experience with this little problem

regards
f9

 

[trackstar]

Fractional Reserve banking is not as much the problem as a lot of other things.

 

[jueco2005]

FRL is the root of all those other things you mentioned.

Quote from trackstar:

Fractional Reserve banking is not as much the problem as a lot of other things.

 

[trackstar]

Quote from jueco2005:

FRL is the root of all those other things you mentioned.

Over leverage is the root of the FRL problem.

 

[ByLoSellHi]

Fractional Reserve Banking lay at the very core of that which is wrong with this nation. It leads to boom and bust economic cycles, not true and sustainable economic growth, and an inevitable collapse.

There is a reason why patriotic Americans have warned us and pleaded with us, throughout history, to be wary of a central bank, and to never be lulled into a system of worthless, fiat currency, and there's a reason why a quite small and powerful group of individuals have sought to suppress the former and ensure they never are allowed to rise to positions of true power.


Jefferson will always represent logic and truth:

"“The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution.”

 

[jueco2005]

Not true.

Please expand your position.

Quote from trackstar:

Over leverage is the root of the FRL problem.

 

[neutrino]

The problem with the fractional reserve banking is that you have the right to withdraw your money at any time. We know that we can't do that all at the same time, and we know that we take a risk of a bank run. But noone forces you to keep your money in an interest earing account. You can put it in a safe deposit box, pay the annual fee, and you can feel secure about your holdings. Even better, you should be able to hold an account in a Federal Reserve bank, and if you need cash, you just go there and cash your federal reserve deposit. And if you are worried about the assets of the federal reserve, you can buy some physical gold.

If there is any problem in the system, it is not in the fractional reserve banking, nor in the fiat currency regime, not even in the Central bank. It is in the power and responsibility we put in the hands of the government. If it is too big and too inefficient and irresponsible, and we do nothing to change it, then any kind of monetary or fiscal system under such government will create unfair distribution of wealth.