Tuesday, 5 March 2013

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.

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