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.