Banks should not be allowed to print money

If we assume that a fiat currency is imposed by force as a result of taxation then counterfeiting that currency becomes a more serious crime than otherwise. If there is no official currency then it is not a crime to counterfeit currencies because we have a right to make pieces of paper in whatever pattern we wish. But if there is an official currency which is required to pay taxes then being able to print your own currency (to counterfeit) is an advantage which should be shared with everyone... if one group of people is able to print the tax-enforced currency then this creates a kind of apartheid where one group of people are treated differently under the law. To be able to (legally) print your own fiat currency places you above those who cannot which is a form of discrimination and is unsustainable.

To have a banking license means that your liabilities are recognised and secured (guaranteed) by the state and so then you are effectively able to print your own currency. Institutions which are able to issue their own currency are themselves quasi-state entities and we can think of them in similar terms to the more familiar elements of the public sector... but with banks they have private assets and profits which means that whilst banks have the advantages of a public entity (being protected from insolvency) they also generate profits for their owners. Banks with a banking licence cannot fail despite having private assets and profits.

There should be no banking licences because it is unfair and unreasonable to expect non-banking entities to compete in a market where some of the participants are able to print their own money. No one apart from the government (and other genuine state entities) should have the power to print money... those who can print money must be democratically accountable otherwise the state is being hostile to those people who cannot print their own money.

Guaranteed banks need the people to be ignorant

Banks are treated differently from the rest of the economy (they have deposit insurance) but the general public is not fully aware of the implications of this. People prefer themselves to banks... that is to say they do not like being in economic servitude to the banks... we can deduce this from how they (the people) react to other forms of slavery and so then we can deduce that their tolerance in a democracy for deposit insurance is either due to the fact that they do not know about it or they are unaware of its consequences. If people know about the realities of deposit insurance then they would not be tolerant of it and in a democracy it would cease to exist. The existence of deposit insurance is possible only if the people do not know about it. Deposit insurance is a secret kept from the public in a democracy.

When people find out about the nature of banking and deposit insurance they will cease to tolerate politicians who are not in favour of letting the banks fail like a normal business. Knowledgeable voters will not want the government to maintain deposit insurance and so the banks will fail when the people find out about how the banking system works... because they will no longer endorse deposit insurance.

The banks will fail when the voters become knowledgeable about banking.

Banks can't print money

Counterfeiting is impossible because no one can print money. Money must have some underlying value if it does not (as with fiat) then it is not money.

Full reserve banking is a natural right

To have anything other than full reserve banking requires support for the banking system from the state. Banks cannot practice so-called fractional reserve banking without deposit insurance otherwise there will be a bank run. It might be possible (for short periods of time) for a bank to have fewer reserves than deposits in a free market but very soon this will result in a bank run. For banks to be able to inflate the money supply to the extent which they have been able to do recently requires the support of the government.

But we have a right for the state not to support banks in this way since it is of no advantage to us (the banks are not providing a public service) and it is a cost to us. Socialism of this kind is justified only if the government is subsidising a public good such has healthcare or education. But since the banks do not claim to be primarily for the public good and since their assets are privately owned (for profit) this is not socialism but merely a government subsidy of a private business which is invalid. Even if socialism is valid this is not socialism. Neither can we claim that the banks provide a vital public utility and that despite them being privately-owned it is still in the interests of the state to protect them. If this is true then there is no limit to the extent to which this argument can be made. If the banks are vital then they should be given all the money they ask for which could be infinite and so if we are not to be owned by the banks then we cannot describe them as vital in this sense. No private firms are vital only the public sector is vital (if this concept exists). No private firm is too important to fail.

Since we have a right that banks are not subsidised by the state then fractional reserve banking cannot exist in any meaningful sense (the banks will not be able to inflate the money supply) and we will have full reserve banking. Since we have a right not to have fractional reserve banking then we have a right to have full reserve banking and full reserve banking is a natural right.

Fractional reserve banking is torture

We can define torture in this context to mean harm imposed on someone by the state for no reason. It is different from the normal execution of justice. Torture by the government is imposed arbitrarily.

Fractional reserve banking is a form of torture because it causes harm to people for no reason. We assume (as we can) that there is a fiat currency in place and that it is possible for the state to subsidise fractional reserve banking. (If there is no fiat currency then the government cannot subsidise fractional reserve banking.) So then it is possible for the state to enable the banks to inflate the money supply. This is torture because it removes value from the rest of the population who do not print money. Since there is a fiat currency in existence this extraction of wealth cannot be avoided by anyone and so this hurts everyone in the economy. There is no reason for this subsidy of the banking system via deposit insurance and so by the definition above it is torture.

The government bans things

We do not have a right to tell other people what they can and cannot do just as we do not have a right to tell them how to behave. Prohibitionism is inherently authoritarian because it relies on the state having authority over the individual. Since in a free country we are free to act however we like provided we do not hurt others then prohibitionism is inherently illiberal and statist. Authoritarianism is wrong because we have control and responsibility for our own lives. Prohibitionism is inherently authoritarian and for that reason it is wrong. If there is no government then prohibitionism would be impossible because no one would take instructions from another person. Prohibitionism relies on the existence of the state to be justified and for that reason it is false. Without the government there would be no prohibition of drugs and so there should be no prohibition of drugs. Without a state there would be no prohibition of drugs and we would be free to consume whatever we like.

Fractional reserve banking is bad

It is bad for humanity if a bank or any organisation is immune from failure and able to inflate the money supply. If someone (apart from the government) is able to inflate the money supply it is likely they will do so meaning that they will be able to acquire a surfeit of property and assets. This arrangement is bad overall and it could even be argued that it is bad for the agency which can counterfeit the currency because they are destroying the planet. (Being rich in hell is worse than being relatively poor in a healthy world.) Even if being able to inflate the currency is not bad for those able to do it it is certainly bad overall so then it is better (overall) not to have state-guaranteed fractional reserve banking.

Inflation is bad for the poor

If banks cannot fail this is a kind of communism because the liabilities are shared. If the liabilities are shared this means that banks are printing money because socialised liabilities are the same as state credit which is (presently) money. Communism is wrong because eventually the state cannot support its people and everyone will starve. If there is a state then it has a duty and an obligation not to be coercive. The state can only be defensive. The problem with deposit insurance is that it relies on coercion from the state. It is state banking.

The truth is not grey

Taxation is aggressive but it also violates the categorical imperative. In a strictly rights-based system of morality we might argue that since we have a right to our own labour we have a right not to be taxed. And whilst this is enough to demonstrate the invalidity of tax we can further show that it violates the categorical imperative because it cannot apply universally. If taxes apply universally then everything is owned by the state and we have communism. But communism doesn't work (which we know from experience) so the state cannot own everything and so it cannot tax completely. Since it cannot tax completely it should not tax at all since otherwise it would be violating the categorical imperative. (All or nothing.) We can say that that which cannot apply universally should not apply at all and so then there should be no tax. If the government cannot own everything it should own nothing and there should be no taxation.

Public banking is not essential

Only essential services should be guaranteed by the state. And whilst it will always be a controversial discussion very few people hold the view that public banking is something which is essential. Since very few people argue that the market is incapable of providing banking then we can deduce that the state should not protect failing banks and that there should be no deposit insurance. The concept of deposit insurance (and all state subsidies) relies on the assumption that society is better off with a particular service being provided to all (for free). But there is no reason to think that people need subsidised banking... since there is no reason to subsidise banks then they should be free to fail since it is expensive to subsidise banks. Unless deposit insurance is required it should not exist because it is a cost to the taxpayer and hence society. Only essential services should be subsidised (because to do so is expensive) and since the market is able to provide good banking there should be no reason to have deposit insurance.

Drug use is not a crime

No one has a right to be a prohibitionist because drug use is not a crime. By definition we cannot do a crime to ourselves because crimes involve more than one person. Even if someone holds the view that to use 'drugs' is a mistake we do not have the right to impose our view of mistakes onto other people... people have a right to make mistakes in your eyes. It doesn't matter if we think someone is doing harm to themselves with their use of drugs... they have the perfect right to hurt themselves. We do not have a right to impose our view of a good way to live onto other people.

The state is not a bank

If there is deposit insurance this means that banks are like the government and cannot fail. But there is no reason for the state to protect the banks in this way... banks could be like any other business and capable of collapse. The existence of deposit insurance indicates that the state considers banks to be like itself and of privileged status. But there is no reason for the banks to be part of the state. Banks and the state can be separate.

Fractional reserve banking is not a Ponzi scheme

If fractional-reserve banking is something different from fraud then all of the participants must be aware of how it works... and subsequently aware of the risks involved. This means that it is more like a pyramid scheme than a Ponzi scheme. With a Ponzi scheme the investors do not realise that their returns are based upon more and more people joining. There is an element of fraud involved in a Ponzi scheme which is absent from a pyramid scheme.

"Promoters also try to minimize withdrawals by offering new plans to investors, often where money is frozen for a longer period of time, in exchange for higher returns. The promoter sees new cash flows as investors are told they cannot transfer money from the first plan to the second. If a few investors do wish to withdraw their money in accordance with the terms allowed, their requests are usually promptly processed, which gives the illusion to all other investors that the fund is solvent."

If banks have deposit insurance then fractional-reserve banking (where the bank is insolvent) becomes nothing more than the counterfeiting of state liabilities. If the banks are not guaranteed then they can fail and fractional-reserve banking (frb) is a pyramid scheme. In a free market frb is a pyramid scheme.

If we assume that the debts will not be monetised when eventually the deposit insurance is tested by the depositors then like all pyramid schemes frb will fail. The banks will not be able to pay back the money they owe and they will fold... leading to hyper-deflation in prices.

Either the banks will fail or there will be significant monetisation of bank debts.

The law is not a consequence of the state

Property rights are established when someone uses force to protect a particular area or object. This means that property rights are always concerned with the opinion of people with regard to whom has the 'right' to occupy a space or have use of an object. The government is often asked to intervene when there is a property dispute such as a burglary. But it is an illusion to think that without the government there would be no property rights. After someone has been arrested for a crime (such as burglary) they may go to gaol or they may be released. It is clear to most people (certainly in 'developed' countries) that the government is far more lenient towards criminals than the average person would be. The people at large are perpetually frustrated by the government when it comes to matters of justice. The government intervenes to prevent an escalation of violence (which has its merits) but too often the end result is that there is no justice at all and the offender is released without consequence. In an anarchist system there would be no government to intervene in the dispersement of justice and people would not be able to violate property rights so easily. The government is a detriment to property rights because it prevents people from protecting themselves. If criminals are released there is no rule of law... as there would be in an anarchist system (criminals would not be released prematurely). Government is a detriment to the law.

The problem with banking is socialism

It might be a nice idea to think that when we place our money with a bank that it is guaranteed and certain to be returned. To make this guarantee possible we have deposit insurance which is a form of socialism whereby the liabilities of most banks are protected by the state. But this form of socialism - like all others - does not come without a cost which manifests elsewhere. There are (negative) externalities to this largess by the government. The result is that the value of existing units of currency is diminished because the guarantee of banks means that eventually there will either be more banknotes or there will be a default of the banking system. Whilst it might appear harsh and uncaring it would be best not to guarantee the banks (and their savers) from failure... this means that all deposits would be made at the risk of the saver and no other person. This kind of individualistic approach to banking and investment would mean that banks would not be able to disrupt the rest of the economy with inflation. It would be best for the rest of the economy to remove socialism from the banking sector.

Deposit insurance is bad for the government

Deposit insurance is bad because it means that a private entity (such as a bank) is able to inflate the money supply. It's bad if banks can print money because then wealth is transferred to people who have not earned it in any meaningful sense. Inflation is bad because it destroys the currency which is a problem for people who need to use it. Since the economy is reliant on the currency being stable then deposit insurance is threatening to the economy. Deposit insurance is bad for the economy. The fiat economy relies on money holding its value so deposit insurance is bad.

The banks can default on the state

If the banks default on the state by refusing to accept fiat money then this would lead to a failure of the state. We can see from the manner in which the state has protected the banking institutions in history that it is the banks which offer more security than the state. We can say that the state fears the banks because there is no other reason for the state to perpetually give the banks socialist handouts. Because the state is weaker than the banks it relies on the banks accepting its currency. If the banks default on the state by refusing to accept fiat deposits and accepting only non-fiat currencies then this will lead to the end of the state as we know it. If the state relies on there being a fiat currency then if the banks reject this currency this will lead to anarchy and the end of the state.

Fractional reserve banking causes poverty

Fractional reserve banking is a leading cause of poverty because it affects everyone. Everyone values money and cannot live without it... people will sell food to get money even if they are on the verge of starvation so we know that money is important in the context of poverty. Fractional reserve banking causes poverty because it enables the banking institutions to increase the money supply. Because of this they can effectively print money which means that everyone else has relatively less money. The financial institutions would not be able to practice fractional reserve banking without deposit insurance because there would be a bank run. The only purpose of deposit insurance is to prevent a bank run so we can deduce that in a free market there would be no fractional reserve banking. The term 'fractional reserve banking' in itself is a misnomer because if the money has been loaned out then the institution is not acting as a bank... it is acting as an intermediary between lenders and borrowers.

Prohibition is a false concept

Crimes involve more than one person so we cannot do a crime against ourselves even if we are doing harm. To do harm to yourself is not a crime and other people have no right to intervene if you are hurting yourself. You have a right to hurt yourself. And we can see from this that (by extension) we have no right to 'ban' drugs because everyone has a right to do as they wish with their own body. We cannot do a crime to ourselves and so other people have the right to take drugs if they want. We have no right to protect people from their own choices. People are allowed to make mistakes if it affects only them. Prohibition (of drugs) is a false notion.

Deposit insurance should be illegal

Fiat currencies are vulnerable to inflation by the banking system. In order to prevent this we can either remove deposit insurance from the banking institutions so that they can fail... or we can make fractional-reserve banking illegal.

Since fractional-reserve banking (frb) is not aggressive (just as counterfeiting is not aggressive) then we cannot ban frb if we are being respectful of natural rights. We can however remove deposit insurance from banks which means that no bank which practices fractional-reserve banking would be immune from failure. This would prevent unsound banking and enable only sound banking.

Since it is the government which provides deposit insurance then to ban it would require a law to be made against the government... which is known as a constitution (a constitutional law). If the definition of a constitution is a law made against the government then to make deposit insurance illegal and thereby against the constitution would prevent unsound banking (and give us only sound banking). We cannot ban counterfeiting and fractional-reserve banking under common law and so the only means by which we can prevent unsound banking is by making (the provision of) deposit insurance illegal. This is in the case where deposit insurance is only provided by the government... naturally private deposit insurance is fine.

To prevent unsound banking and make anything other than sound banking impossible we must ban deposit insurance (provided by the state) and make the constitution prohibit deposit insurance. Deposit insurance (provided by the state) should be illegal.

We are owed everything by the government

We are owed everything by the government if there is a government. To be a government is to take responsibility for and ownership of other people. This means that we are violating their rights and in return we (the government) provide them with services and protection. Since the subject of government is now owned by the government and is a slave then they are owed everything by the government. There is nothing which is not owed by the government to the people. If the government is not able to give everything to the people (it is not magic) then it should not take on this responsibility. If the government is not magic then we should have no government. Only magic governments should exist... the government should be nothing but magic.

If banks can't fail there is no freedom

To be free requires that banks can fail. If banks can't fail then they will be able to increase the money supply which means they can extract wealth from the economy. If banks can't fail then fiat money has value (otherwise the government would not be able to save the banks) and so banks can then effectively print money. If banks can print money (for profit) the rest of the economy is not free and there is no freedom. There is no freedom if there is bank deposit insurance.

Money is a false concept

Protecting the banks from failure causes poverty

Deposit insurance creates poverty for everyone because it means that banks are able to increase the money supply... this makes everyone poor because only those willing to get into debt to the banks are able to purchase assets and to be in debt is a form of poverty in itself. If we are in debt we are poor but if we do not get into debt in an economy with a fractional-reserve system then we cannot purchase assets (debtors can bid more) and so then we are also poor. In a credit-fuelled economy everyone is poor because it is only by getting into debt that we can survive... which in itself is a form of poverty. The subsidy for the banks which is deposit insurance causes poverty for everyone.

Fractional reserve banking is a myth

It is not possible to engage in fractional reserve banking because there will be a bank run. It is impossible to keep the truth from an inquisitive public forever and so fractional reserve banking will always result in a bank run and no more frb. Frb is only temporary because when the public find out there will be a bank run to prevent it. Bank runs prevent fractional reserve banking so it cannot exist. It might however be the case that there is (government) deposit insurance which prevents a bank run (as is its intention)... but then this is not fractional reserve banking. Frb requires that there is no deposit insurance. If there is di then this is not frb it is something different because the deposits are fully-backed with government credit. If there is di this is not frb... frb cannot exist.

Fractional reserve banking requires a state

The state can protect the banks. If there is not a state then banks must fail if there is a bank run and there are not sufficient reserves... fractional reserve banking is impossible if there is not a state. It is only if there is a state and subsequently deposit insurance that banks can be immune from failure. Banks can fail if there is not a state.

If there is a state there can be deposit insurance. There can be no deposit insurance without a state.

If banks can't fail (then) they can print money

Deposit insurance is criminal

It is criminal that any organisation cannot fail... and in the context of banking for banks to have deposit insurance is criminal. It is criminal for banks to have deposit insurance because this means they cannot fail and an institution which cannot fail can print money (if there is a fiat currency). Banks can print money because they cannot fail... which is a crime. It is a crime to give banks deposit insurance.

There is frs (state) but not frb

Nothing of value can be printed out of thin air. A share in a company can be thought of as a token of value but only because we recognise it as a symbol of ownership of the company. It is not the share itself we value but the legal entitlement it represents. But with fiat money we do not own a piece of a viable company we own a piece of the government which doesn't make a profit. So fiat money is worth nothing because it symbolises only the ownership of the government. The problem with fractional-reserve banking is that lending entities are able to create wealth (through inflation) when they make loans. They are printing money just as the government does and it is only because of the ability of the government to print wealth that banks are able to do so. Without fiat money fractional-reserve banking is impossible and so we can deduce that soon frb will be impossible... since fiat currencies do not last forever. Non-fiat 'hard' currencies make it impossible for banks to engage in fractional-reserve banking because in the event of a bank run it would be impossible for the bank and the state to return the deposits. Hard currencies prevent fractional-reserve banking.

Deposit insurance is not a right

If customers have loaned their money to a bank in the form of making a deposit they have no right to expect the taxpayer to protect them. If the value of bank credit rests on deposit insurance this means that without taxpayer support a person's savings are worthless. But we have no right to expect other people to protect our savings... if we take this expectation to the absurd conclusion we can see that someone could fraudulently make a loan to an accomplice and then claim a taxpayer refund when the loan goes bad. It is a false concept to think that we have a right for our investments to always be guaranteed by the state. If we have taken a risk with our money we have no right to socialise the losses which is why there is a problem with deposit insurance. Bank customers have no right to expect other people to protect their deposits.

Deposit insurance is not socialism

It is strange to be a socialist if the government you support prefers to subsidise the banks than the people. If the government protects the banks by providing deposit insurance it is helping them at the cost of the rest of the economy so it is helping banks at the cost of everyone else. Since there is deposit insurance we can say that to support the government is to support the banks at the expense of the poor... socialism doesn't help the poor if there is deposit insurance. Deposit insurance doesn't help the poor and if the government supports deposit insurance then it is not socialist (if socialism is good for the poor). If the poor benefit from socialism then deposit insurance is not socialism.

Deposit insurance is criminal

There is no reason for the government to provide deposit insurance to the banking industry... it is perfectly possible for banks to fail. The consequences of bank failure are not worse than to perpetually 'save' the banks. If the banks are saved this causes inflation which is borne by the rest of the economy even though they have no true liability (culpability). Those who suffer from the inflation are not the cause of it in the sense that they did not invest in an insolvent bank. For the government to provide deposit insurance to the banks in these circumstances is to take wealth from the rest of the economy and give it to insolvent banks and their customers... which is a crime. The government is criminal if it provides deposit insurance to insolvent banks. It is criminal for the government to provide deposit insurance.

We are slaves if there is deposit insurance

To be in an economy where a private entity such as a bank is able to increase the money supply and cause inflation is a form of slavery. If there is a government and fiat currency then the liabilities of the government are owned by everyone and the government has a responsibility to make sure it does not issue too much currency. If fiat currency is credit of the government then it is also the credit of the people... when the government issues credit (cash) it is issuing liabilities of the people. If private banks are also able to issue currency then we can consider this situation to be a form of slavery. (For a private company to have the right to issue the credit of the people is to own the people). In an economy with a fiat currency that currency becomes a form of objective wealth... to be able to print money is to be able to issue wealth out of thin air and so if others have this ability and not ourselves we are a slave to that person. If banks can print money they 'own' the rest of the economy and the rest of the economy is a slave to the banks.

There is frg but not frb

It's not really true to think of a concept such as fractional reserve banking... banks cannot do this on their own... they can only do 'frb' with the assistance of the government. So this practice (where it exists) should properly be called fractional reserve government. Fractional reserve banking is a false term because it implies the practice is possible in a free market without the assistance of the government. Only the government can expand the money supply by making loans so only the government can exist with less than full reserves. Only the government can do fractional reserve banking so it should be called fractional reserve government.

It is inevitable that the banks will collapse

To deposit money in a bank is similar to giving money to the state and expecting something in return in each case we give up wealth on the understanding that something is owed to us in the future. But if we cannot provide our own security (from theft) why should we 'trust' the banks... if the banks are more secure than any security that we ourselves can provide then there would be no reason for the banks to return the money since they are more powerful than we are by definition. Like the state the banks are much more powerful than the individual who uses the banks and so there would be no real reason for the banks to repay the customers other than a failure to receive more deposits (in the future). So if the bank returns your money this is entirely voluntary on their part... they are doing you a favour since they are more powerful than you. Banks have no reason to be loyal to their customers and it is likely that the banks will default on the credit owed to their customers... certainly in the situation of them being unable to pay for having made (bad) loans. If the banks are insolvent they certainly will not be in a position to repay the debts they have created. If a bank practices fractional-reserve banking it is insolvent and will be unable to repay the credit it has created whether it is powerful or not. And neither will the state since to monetise the bank credit with new money is the same as to default on the debt. As soon as the bank causes inflation by making a loan with deposits (which are still considered viable) it has entered insolvency and will be unable to repay the debt. Since most of the loans are false and will not be returned in kind we can say that the bank will be unable to return customer deposits. The banks will default on the credit that they have created... eventually. There will be a default of the customer deposits either by outright refusal to pay or a monetisation of the loans... the banks will collapse since they are not solvent.

Banks have private assets

It should be illegal for any organisation which cannot fail to increase the money supply... unless they are the government and they are knowingly and deliberately causing inflation. It is perfectly possible to imagine an economic system whereby we encourage the government to increase the money supply from time to time. Part of the reason this might be good is that it would reduce the negative impact of debt on the borrower. So it might be good for the government to increase the money supply occasionally but there is little justification for private firms which are not the government to print money. Also there is little justification for other non-bank parts of the government to print money such as schools and hospitals. We do not imagine that it would be a good idea to make each school and hospital similar to the central bank with the ability to print money. Such a privilege should be held centrally by the government to make sure inflation does not get out of control. Not all parts of the government should be able to print money. If a bank has deposit insurance then it is part of the government and (in theory) has the ability to increase the money supply. If we want to protect the currency we should make it illegal for banks with deposit insurance to make loans and increase the money supply. Unlike the rest of the public sector banks have private assets which means that it is inconsistent to enable them to print money because they are making a private profit and do not claim to be acting entirely in the interests of the country as a whole. Even if they have deposit insurance banks are still not like the rest of the public sector (they have private assets) and so they should be constrained from printing money. Only those parts of the public sector without deposit insurance should be able to print money. Banks should not be ale to print money because they have private assets unlike the rest of the government. Only those institutions which do not have private assets (all assets are public) should be able to print money. No private organisation should be allowed to print money. Banks should not be allowed to print money because they have private assets. Only the entirely public sector should be allowed to print money and since banks are not (fully) public they should not be allowed to print money. Banks are not public and so should not be allowed to print money. An institution with private assets is not part of the state.

The banks are not the state

We can regard fiat money as money issued by the state in return for security from crime. The state issues fiat money and we can think of these as tokens which represent a unit of security which has been provided by the state. So then it is normal and consistent for the state to be able to issue this type of fiat money. We would not expect a private firm such as a bank to have the same right to issue this money because it has not provided any such security to its customers. It has (perhaps) provided a free-market service such as banking but it has not provided any security in the manner that security is provided by the state and so we would not expect banks (or any private firm) to have the right to print fiat money. There is no reason for the state to give to the banks this special privilege. If banks do not provide an essential security to the people as is provided by the government then they have no reason to be able to print money. Banks are not part of the state and so it is inconsistent for them to be permitted to print money... only the state should be able to print fiat money because it is only the state which provides freedom. The state provides freedom so it should be allowed to print money but not the banks because they provide no freedom only a service... which is not the same thing. The banks are not the state and so they should not be allowed to print money.

The Austrian School is not insane

Fiat currencies are vulnerable to inflation caused by both the government and the banks. If the banks are guaranteed by the government they will be able to cause inflation just as the government is able to do. With banks this generally occurs when the banks engage in something called fractional-reserve banking. Which can only exist with state support. So if there is a fiat currency and state support for the banks then the banks will be able to inflate the currency for private gain. Inflation by the banking system is different to the inflation which is typically generated by the government in that there is a private incentive to cause inflation. The assets of the bank are held privately unlike those of the government. So if there is a fiat currency and we want to avoid enabling banks to inflate the currency then we need to make sure the government is 'alive' to the risks of fractional-reserve banking. Such a government can be described as an Austrian government... named after the Austrian school of economics. If the government is an Austrian government then banks will not be able to inflate the money supply because either frb will be prohibited or there will be no deposit insurance (and banks can fail). If the government is Austrian the banks will not be able to inflate the currency even if there is a fiat currency. If there is a fiat currency and a non-Austrian government then there is a risk of bank inflation. There is a risk of bank inflation if there is both a fiat currency and a non-Austrian government. If there is a fiat currency then the government needs to be Austrian otherwise the banks will be able to inflate the currency. Bank inflation will be prevented if one of two possible conditions is satisfied: i) there is no fiat currency... instead there is a hard currency; or ii) there is an Austrian government. If neither of these is true then the (private) banks will have the ability to inflate the currency. The banks will be able to inflate the currency if neither of these conditions is true. Only an Austrian government can prevent bank inflation of a fiat currency.

Deposit insurance causes debt

Without the existence of deposit insurance there would be very much less debt owed to banks. People would borrow less from the banks which would mean there would be less inflation of the currency. The reason deposit insurance tends to lead to more debt is that without deposit insurance (DI) the customers of the bank would be unwilling to lock up their money in the loan. Deposit insurance enables the banks to loan out the customer deposits without any material risk to the customers. But if there is no DI then the customers of the bank might lose their money... certainly for a limited period of time and perhaps forever if the money loaned is not returned. It is because of DI that there is so much debt in the economy. Without DI there would be very much less debt in the economy.

Inflation is a form of aggression

We have a right to be free from bank inflation. This is true whether or not the banks are guaranteed by the state. If they are guaranteed by the state and able to increase the money supply then savers are being exploited against their wishes. If the state has any authority then its money is not the same as other (private) forms of credit and as a consequence it has a responsibility not to exploit savers. So if banks have deposit insurance and increase the money supply savers are being exploited... which is a violation of their rights. If state money is important savers have a right to be free from inflation. If banks are not guaranteed then this is a private kind of fraud. Clearly people who use a bank do not expect their savings to be spent by the bank on loans... the only function of the bank is to keep the money safe... so their rights have been violated knowingly by the bank. Private frb is a violation of our natural rights because we have been lied to deliberately by the bank. The bank has failed to do the one thing which is required of it. When banks are guaranteed by the state this is a violation of all savers because we have a right to be protected by the state from inflation. Deposit insurance is a violation of our rights because banks are not part of the state and so have no right to benefit from this subsidy at the cost of savers. We have a right for there to be no deposit insurance. Deposit insurance is a violation of our rights. Since (state) money can be thought of as a store of wealth and as the property of those who own it... then deposit insurance is an aggressive invasion of those rights. Inflation is aggressive and deposit insurance is aggressive.

Inflation by banks is illegal

If we assume that it is necessary to have a viable currency for an economy (and a civilisation) to work then fractional-reserve banking is a bad thing for civilisation. Whether or not the banks are guaranteed and permitted to increase the money supply frb still causes problems for the economy. If we take the case where banks are not guaranteed by the state and they are maliciously spending their customers' money then this is clearly a crime. The bank has promised to look after the money (that is their only function) and they have failed to do so. This is fraud. (They have defaulted on a promise.) If however the bank has a guarantee from the state and permission to increase the money supply then this too is problematic because the inflation caused takes wealth from other people without their consent. For the banks and not the government to cause inflation in this manner is a crime because the rest of the economy has not consented to the inflation... and the banks are not democratically accountable. The banks have no right to increase the money supply and cause inflation even if they have been given permission from the state. The state has no right to deprive the people of a viable currency in this manner. The state and the banks in combination have let the people down (failed in their obligations) if the banks are able to cause inflation. The state has failed in its proprietorial duty to protect the people and the economy (by enabling the banks to cause inflation). The banks have inflicted a crime on the people by inflating the currency via fractional reserve lending. Fractional-reserve banking is a crime whether or not it is guaranteed and permitted by the state... the law is objective not subjective and frb is a crime whether or not the state agrees. Frb if a crime even if there is deposit insurance. It is a crime for the banks to cause inflation (always). Only the state can execute inflation without breaking the law... it is a crime for any private firm to cause inflation. Inflation is a crime if it is not caused by the state. Only the state can legally produce inflation. Inflation is illegal unless the state does it. Only the state can legally produce inflation.

Frac. res. banking is the worst way to get inflation

Fractional reserve banking enables the government to have inflation and erode savings. But sometimes it might be preferable to allow some degree of inflation... we might argue that this is somewhat progressive because it means that the rich who have savings are penalised in favour of the poor who have no money. Although this is generally not the case (the rich have non-money assets such as real estate) there is nevertheless an argument to say that some inflation is good. So the 'problem' with fractional reserve banking is not that it causes inflation but that the means by which the inflation is generated is not optimal. There are almost unlimited different methods by which inflation can be produced by the state... frb is about the worst possible choice to make. If inflation is good then there are many better ways for the government to produce inflation than frb. Fractional reserve banking is about the worst way for the government to produce inflation.

Anything other than full res. banking is inflationary

If a bank makes loans with insufficient reserves this is liable to cause inflation... especially when there is deposit insurance. The problem with deposit insurance is that it encourages banks to make loans which are not fully backed. They are encouraged to practice fractional reserve banking which means they have less than full reserves. If there is not full reserves (and no bank run) then banks are creating an excess of currency. Inflation is caused whenever it is possible for a bank to practice fractional-reserve banking. Banks cause inflation if they are not full reserve banks.

Fractional reserve banking causes poverty

Fractional reserve banking causes homelessness because it enables people to get into debt and purchase property which would otherwise be too expensive for them. The result of this is that house prices in general increase to the point where people who are not willing to get into debt cannot afford them. Fractional reserve banking makes houses too expensive for people who are not willing to get into debt. The problem with fractional reserve banking (frb) is that it makes assets such as housing too expensive for people who do not want to get into debt. Frb makes housing expensive which causes poverty and homelessness. Frb causes poverty because people who do not get into debt cannot afford to obtain assets such as housing.

Only the left want to change banking

Assuming that it is not good for private firms to have the ability to increase the money supply (that banking is bad) then we would assume most people would be opposed to how banking operates. If we do not want to allow private firms to be able to cause inflation we would want to change the system. If we want a 'sound' currency. Because the government allows the banks to inflate the currency it is inconsistent to be supportive of the government and for sound money. We cannot support the government if we support sound money. But it is not so important that we are able to support the government. (It is not vital that we are able to support the government.) If being against the government is not a problem for your philosophy then the currency arrangement with banking is fine. We only have a problem with banking if we object to the role of the government in enabling the banks to cause inflation. If we are fine with the role of the government in allowing the banks to cause inflation then we have no objection to banking. Only people who support the government want to change banking.

The government is letting banks print money

One of the functions of government is to protect the people from out-of-control inflation. If there is too much inflation the economy cannot function properly and there can be no civilisation. We require a stable currency for commerce to work properly. But if the banks are able to increase the money supply at will due to their being insured by the government then we will have excessive inflation. We have excessive inflation because the government provides deposit insurance to the banks and enables them to engage in fractional-reserve banking. It is the fault of the government that banks are able to increase the money supply and it is the role of government to protect the people from inflation. The government has a responsibility to stop inflation even if it is being committed by the banks. Not even the banks should be able to cause inflation. The government should stop the banks from causing inflation if it is being consistent in protecting the people from economic hardship. It is one of the functions of government to prevent inflation and it is failing to do so.

Banks cannot legally print money

Despite the fact there have been no arrests it is a crime to counterfeit the currency and increase the money supply. The only exception to this rule is that the government can print money. An organisation such as a commercial bank with private assets is not the government and so cannot legally print money. Only the government can legally print money and so the banks are breaking the law when they practice (guaranteed) fractional-reserve banking. If frb is not guaranteed by the government and banks can fail this is not counterfeiting. It could be considered to be fraudulent but it is not counterfeiting because it does not increase the money supply. Banks are only committing a crime if they have deposit insurance and are guaranteed. Fractional-reserve banking is a crime unless the bank is not guaranteed by the government and can fail. If there is deposit insurance then frb is a crime. It is a crime for banks to increase the money supply.

It is strange that voters let banks print money

The problem with banking is that the voters enable banks to increase the money supply which leads to inflation. There is no reason why the voters are better off enabling the banks to act in this manner. If it is good to have a fiat currency then it is possible for only the government to print money. There is no reason why voters (unless they are a bank) would want the banks to print money.