My ideal world includes banks and an elastic currency. You're making assumptions and they're incorrect.
As for the question - no, I wouldn't lend you the money. The gold standard assumes a deflationary price level, and holding money is superior to lending it out, assuming the interest cost is zero. Interest has to be paid to compensate for loan risk.
In todays world, banks loan out money they create as digital ledger entries, and the value from that loan is derived from all the holders of dollars, who are robbed an incremental amount, when that loan is spent. The owners of the currency are the people, and the people have to be compensated for the principle they forgo when a loan is made (decline in a dollar holders purchasing power via an increase in the money supply when a loan is made).
Your example proves my point. The loaner of the money has to be compensated for the loan (the people).
Firstly, the people aren't loaning anything, it's your private capital we're talking about. And yes, for sure, you need to be compensated for the risk inherent in making the loan. Given all this, how do you know that in today's system, the 3% or whatever rate that the banking system "charges" the economy isn't "compensation for loan risk", which would work the same exact way with commodity money, as you have stated yourself? Moreover, as always, you seem to be forgetting the other side of the loan. Specifically, if I have obtained a loan and my widget-making project has generated more value-added than the total interest I have had to pay on the loan (net of depreciation, etc), I have actually added to the system's purchasing power.
No, it appears your definition is incorrect.
The federal government realizes a financial gain when it issues notes or coins because both forms of currency usually cost less to produce than their face value. This gain, which is known as âseigniorage,â equals the difference between the face value of currency and its costs of production.
http://www.gao.gov/modules/ereport/..._savings/General_government/42._U.S._Currency
The point is that like Governments, commercial banks also create money and their production costs are near zero. From which they also derive a profit from the creation of that money. Not from spending it like the Government, but from loaning out, to earn interest.
It's the power to CREATE MONEY that is the essence of senioriage, and commercial banks have exactly that. You are splitting hairs and being difficult. Even the Dallas Fed implied commercial banks have the power of senioriage (which all banks clearly do), however, their focus in a research paper was on the Central Bank or Government benefit. Not the private benefit commercial banks receive.
Firstly, if you think about it, you will see that the definition that I have given and the one you have are actually one and the same thing, when applied to the government. Secondly, even if we apply this definition to the money created by the banking system, you would have to calculate it accordingly, rather than using 3% annual applied to all credit, which is not consistent with your own formulation. Finally, no, the point is that commercial banks "create" money through making
risky loans. Sure, you can call all the commercial bank profits "seigniorage", but I am pretty sure that even you'd agree that this would be plain wrong. You can call a fraction of the profits "seigniorage", but that's part and parcel of the fractional reserve system.
Finally, it appears to me that what you want to create is a 100% government-managed and regulated full reserve banking system. I am, frankly, amazed by this, since I thought you're a proponent of capitalism and free markets. A system where the government decides how and where to allocate credit isn't my cup of tea, so I can't agree with your ideas.
