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View Poll Results: Is fractional reserve banking a necessity?

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  • Yes

    6 46.15%
  • No

    4 30.77%
  • I don't even know how to use wikipedia

    3 23.08%
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  1. #51
    Senior Member Dom's Avatar
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    Quote Originally Posted by Lateralus View Post
    No, we best educate.

    Has it really worked that well for the last 100 years? The worst economic depressions have occurred in the last 100 years. Before the advent of fiat paper money, no nation had ever seen hyperinflation. All the current system adds is larger peaks and valleys. It doesn't add to output efficiency, at all. If anything, it serves to decrease output efficiency as people 'chase the money'.
    My instinct is to agree, however I find it difficult to see how the process of this education wouldn't simply precipitate the exact financial crisis we want to change the system to avoid... anychange would surely require the alteration of the reserve ratio to be made with a delay permitted for old loans to run their course so that the banking system could move to a more secure system without dramtic reductions in the availability of currency. A gradual moving toward more secure footing, or woul dyou advocate something more radical than improving the reserve ratio or doing so in steps toward holding the reserves required?

    Actually, people would just use whatever is convenient as an exchange media. For example, post WWII Germans used cigarettes as currency.
    I guess so, depends on what you call currency really, people bartered too; exchanging goods for goods and services....

    Throughout most of history, inflation was small-to-negligible (at least by current standards). How is it that the rich didn't acquire all of the wealth back then, if inflation was so low?
    Was it? By the standards of the day? And the rich did, the wealth was expressed simply as land, and they rich really did have all of that, and the means to effect law to take it from the commons. I would also suggest that inflation wasn't always small untill the last 100 years, during the reign of henry IV and V inflation quadrulpled the price of living. There wasn't enough moeny and the governments simply printed/minted more (or reduced teh true silver/gold content)...
    Huh? This run-on sentence has me confused.
    Pity!

  2. #52
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Dom View Post
    I guess so, depends on what you call currency really, people bartered too; exchanging goods for goods and services....
    Currency is anything used as a media for exchange because bartering can be cumbersome. Let's say you have fish and I have bananas, and you want bananas, but I don't want your fish. You're SOL, unless there is something else we can use as an exchange media. If I can buy potatoes with cigarettes, I'll gladly accept cigarettes from you for my bananas. In this case, cigarettes are currency.

    Was it? By the standards of the day?
    Very much so. It's physically impossible to inflate silver or gold currency by 10% per year. Sure, it can be done once every century (recoinage) or so, but it cannot be done year after year. There are logistical limitations. Printing paper money is much, much easier. And these days, you don't even have to print actual paper money. You can just make a notation in ledger.

    And the rich did, the wealth was expressed simply as land, and they rich really did have all of that, and the means to effect law to take it from the commons.
    Using the law to control all wealth is not the same as using a free market to control all the wealth.

    I would also suggest that inflation wasn't always small untill the last 100 years, during the reign of henry IV and V inflation quadrulpled the price of living. There wasn't enough moeny and the governments simply printed/minted more (or reduced teh true silver/gold content)...
    Sure, there are instances of inflation in the past. The difference is that they were temporary. They didn't have inflation month after month, year after year, decade after decade. That inflation was short-lived. Prices quickly stabilized and there was no more inflation until the next time a monarch decided to recoin all the money.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

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