Who Were the Sea Peoples?

I think you're going to have to work to outlaw Ripple , since it can effectively create money "out of thin air." (I've noted before that I find that complaint bizarre: if someone managed to create steak or smart phones or sweaters out of thin air, we would think it was fantastic. Why is it supposed to be bad if someone can do the same with money?)

I'm reading a review of Capital, the State, and the Monetary Mode of Power in The Review of Political Economy , and I am really struck by how similar the Marxist view of credit creation is to that of the 100%-reservists: basically, it is a way of bestowing claims to goods upon certain (undeserving) people. This certainly is not an argument against either the Marxist or Rothbardian view... in fact, some people might be encouraged that someone arrived at the same finish line from a different starting point. But I wonder how many people in either camp are aware of this similar conclusion?

Suppose we are tradesmen. It matters little to any of us what commodities he takes in exchange for goods (other than commodities he himself can use). But if he takes what others refuse he is stuck with something useless, and if he refuses what others take he needlessly inconveniences his customers and himself. Each must choose what he will take according to his expectations about what he can spend -- that is, about what others will take: gold and silver if he can spend gold and silver, U.S. notes if he can spend U.S. notes, Canadian pennies if he can spend Canadian pennies, wampum if he can spend wampum, goats if he can spend goats, whatever may come along if he can spend whatever may come along, nothing if he can spend nothing. -- David Lewis, Convention , p. 7 Lewis is correct: the essence of money is a convention. Menger may or may not have been correct about how money came into being, but once it did so, the essence of somethings being money is, "I should accept this for my...

A main "historical method" of the 100%-ers seems to be to imagine how they think free banking would have worked, and then to assert that it actually worked that way. e.g. "I imagine that no fractional reserve accounts ever had a 'when available' clause, and therefore, none did!" Here, George Selgin uses actual warehouse receipts and actual fractional reserve notes to make nonsense of Rothbard's claim that FRB notes were "counterfeit" warehouse receipts. A sub-species of the above "method": I often see 100%-ers "correcting" George on how free banking worked. Here is what you are up against: Sandy Ikeda told me that he once stood with George in the Bobst Library at NYU. George indicated a huge wall of books on money and banking, and said: "I'm going to read every one of those." Sandy concluded, "And you know, I think he pretty much has." You, 100%-reserver, have read three articles at Mises.org ...

I have sometimes heard 100%-reservists say that 100% reserve banking would be overwhelmingly chosen by customers if it were available. Well, as Kurt Schuler notes , it is available, at almost every bank. It is called a safety deposit box. How many of you people who think fractional reserve banking is fraudulent are keeping your money exclusively in the 100%-reserve system instead? NOTE: By the way, I yanked the post previous to this one because I realized I didn't have the stomach for the follow-up s&*t storm right at the moment.

In this paper , Hoppe, Hülsmann, and Block (HHB) make their ethical case against fractional reserve banking (FRB) based on the fact that "two individual owners cannot be the exclusive owner of one and the same thing at the same time." They then posit that since fractional reserve bank notes creates multiple titles or claims to the "same" gold, they are inherently fraudulent. In analyzing this claim, the first thing we will have to do is to turn it into a remotely sensible claim. No one who deposits money at a bank thinks they are entitled to the same money back. What they want, when they go to get their money out, is the same amount of money back. What a gold-backed  fractional reserve note comprises is a claim to a certain amount of gold, not certain particular pieces of gold. I hope that change to their argument is uncontroversial! So their complaint comes down to this: if a bank issues pieces of paper that allow the bearer to claim a certain amount of gold...

George Slegin : "It is unfortunate that Congressman Paul has chosen to accept Rothbard's characterization of fractional reserve banking, thereby wedding his call for monetary freedom with an extremely mistaken idea of what such freedom would entail in practice. In fact bank "deposits" have been recognized both in practice and in common law since early modern times to consist of debt claims to money (coin, back then), ownership of which was in fact transferred, along with possession of the coins, first to the banker and then to the banker's borrower-customers. The original depositors retained a right to reclaim an equivalent sum of coin, sometimes on demand, and the banker's only obligation was to have sufficient coin on hand to meet any such demands, the normal penalty for failure to do which was failure. The contrary Rothbard view that bankers must be stealing whenever they lend part of their 'deposits' is the sheerest poppycock, lega...

If you think fractional reserve banking should be illegal, do you think the same thing about any mismatch between your short and long loan maturities? That very thing, after all, was a big problem in the recent financial meltdown. If you think FRB should be illegal, it seems you ought to be for financial regulation that requires an exact match between the maturity of what you have borrowed and the maturity of what you have lent. If you are not for that, why not?