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Under a commodity standard, money is the product of human action but not of human design.
One of the arguments I’ve seen leveled in favor of fractional reserve banking in recent weeks, goes something like this:
Any law against fractional reserve banking denies otherwise free men their right to contract with one another.
On a purely technical point, there need not be any specific “law” against the practice in order to nullify the [...]
Shortly after I published A Belated Reply on Fractional Reserve Banking, Jeff Molby inquired of me via email. I sent him a short response with the intent of responding more completely, here. There were a number of good comments/questions raised by other readers, and I do intend to respond to them, in turn. [...]
People use banks not primarily to store money, or to earn interest on their deposits (most people earn an alarmingly paltry return on checkable deposits and savings accounts alike) but to facilitate the tendering and receipt of payments. In an advanced economy, monetary evolution results in more-or-less widespread use of fiduciary media.
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