volition on Nostr: npub1t3ggc…jl5g4 just saw this. I should have been more clear and stated ...
npub1t3ggcd843pnwcu6p4tcsesd02t5jx2aelpvusypu5hk0925nhauqjjl5g4 (npub1t3g…l5g4) just saw this. I should have been more clear and stated “fractional reserve banking”. That said, here is a definition from Investopedia:
“What Is Fractional Reserve Banking?
Fractional reserve banking is a system in which only a fraction of bank deposits are required to be available for withdrawal. Banks only need to keep a specific amount of cash on hand and can create loans from the money you deposit. Fractional reserves work to expand the economy by freeing capital for lending. Today, most economies' financial systems use fractional reserve banking.”
The key point being that banks ‘promise’ depositors (creditors) they can withdraw ‘on demand’, but then only keep a fraction available lending it out to others for a period of time (locking it up in time).
The conspiracy: This is actually a fraudulent practice as the bankers are effectively stealing the depositors time. The market will self correct through ‘bank runs’ but then the State often bails these out.
So, is it actually a fraudulent practice and should be outlawed?
“What Is Fractional Reserve Banking?
Fractional reserve banking is a system in which only a fraction of bank deposits are required to be available for withdrawal. Banks only need to keep a specific amount of cash on hand and can create loans from the money you deposit. Fractional reserves work to expand the economy by freeing capital for lending. Today, most economies' financial systems use fractional reserve banking.”
The key point being that banks ‘promise’ depositors (creditors) they can withdraw ‘on demand’, but then only keep a fraction available lending it out to others for a period of time (locking it up in time).
The conspiracy: This is actually a fraudulent practice as the bankers are effectively stealing the depositors time. The market will self correct through ‘bank runs’ but then the State often bails these out.
So, is it actually a fraudulent practice and should be outlawed?