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.