Sunday, 28 October 2012
Frb is impossible if the people are enlightened
One of the interesting things about banking and fractional reserve banking is that people don't seem to mind if (guaranteed) banks print money. (We can deduce that they are unenlightened.) If the government prints money by means of Quantitative Easing or something similar there is a frenzy of outrage in the media but if the 'banks' print a similar amount or much more there is silence. The media allow printing of money if it is perpetrated by the banks. Only the (non-bank) government is prevented from doing so by the media. The media are correct to object to inflation but they do not realise that deposit insurance merges the banks and the government. The failure of the media to object to frb indicates they don't know how the system works. Since the media are so easily tricked we could suggest that the practice is a fraud perpetrated by the government... people think the banks are private which enables the state to print money. Frb is possible only because the people think the banks are private.
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