Counterfeiting of government money is a crime

If someone can print money they can buy assets (such as land) which is a detriment to the rest of the market because those products then become more expensive. It can be argued that counterfeiting is not a crime because it involves only our own property and is not aggressive, it does not affect others, so the argument goes. But if we have a need for a state (to protect property rights) then this argument begins to fall down, at least as far as the counterfeiting of money is concerned. If we counterfeit money then we have the ability to buy assets which is to the detriment of others in the market, this is not the same as counterfeiting other goods because this might be defended as a natural right, which is not the case with money.

If the state chooses to print money this is normal and consistent and not counterfeiting and so then not a crime. It is when typical non-state citizens print state money that it can be argued that a crime has occurred, because prices increase for everyone else. If the state has a right (and a need) to exist and print money then the counterfeiting of that money is crime because it destroys the ability of the state to print money, which we have accepted is a requirement, for property rights.

Counterfeiting money is a crime since the state has a right provide a stable means of exchange and to print money is an affront to their ability to do this. It is a crime because other people cannot legally print money and yet state-money will always be able to purchase goods which means that other people are being stolen from, in their inability to print money. If the state can print money then no one else can otherwise those who cannot print money will lose out. If there is state money then counterfeiting is a crime.

Deposit insurance is unhelpful to the state

It is the central bank which enables the commercial banks to attach their credit to that of the state. Via deposit insurance the broad money issued by the commercial banks is given the same value as that of the base money irrespective of the credit-worthiness of the banks. The banks are able to get into as much debt as they like and in contrast to the state they have little interest in protecting the currency. The state (we must assume) has an interest in preventing inflation because this could have a negative impact on the voters but the banks have no such concerns. The banks are able to extend the money supply to an excessive amount due to the presence of central banks and deposit insurance.

If the government allows the central bank to protect the banks in this way (and this is the major function of the central bank) than the currency of the state (the base money) will be threatened with dilution. By enabling the central bank to protect the commercial banks the state exposes its own currency to hyperinflation which would bring down the state itself in any meaningful sense. The state is vulnerable to collapse merely because it provides deposit insurance to the banks and doesn't constrain the activities of the central bank.

The central bank and deposit insurance have the capacity to destroy the government via hyperinflation because the commercial banks will issue unlimited credit if there are no constraints on them doing so.

Counterfeiting is theft from the state

In most jurisdictions counterfeiting of money is a crime. This is because the state is a legal entity which is different from other entities in that it is democratically elected and representative of the people. Since government-issued money is generally treated as valuable then it is possible to gain value by counterfeiting currency which detracts from the value of the rest of the currency and it is for this reason than counterfeiting of the national currency is a crime.

Counterfeiting is theft from the state.

Because counterfeiting is theft then when banks have deposit insurance they should be careful not to extend an excess of credit otherwise new currency must be issued to keep the banks solvent. If the banks are in the protection of the state they have an obligation to prevent the government from needing to bail them out. Bank insolvency (or even the risk of insolvency) is theft from the state if the bank benefits from deposit insurance. If banks have deposit insurance then they must stay solvent at all times (avoiding even the risk of insolvency) otherwise they are stealing from the state.

Counterfeiting is theft (from the state) and if banks have deposit insurance they must not allow themselves to become insolvent otherwise they are committing a crime (from the state). Banks steal from the state if they are insolvent and have deposit insurance.

Deposit insurance is (a form of) credit insurance

If a bank can't fail then the reason for this is that it is guaranteed by the state. The name of this insurance is usually 'deposit insurance' which sounds more benign than credit insurance. The term 'credit insurance' gets closer to elucidating (clarifying) the nature of the problem with the banking system. If credit (of any organisation) is guaranteed then this leads to inflation of the money supply. The term deposit insurance tends to refer only to banks but the problem would be the same if the credit of any firm is insured... it is not because the agency is acting as a bank that there is a problem. A deposit is only one kind of credit which is specific to banks so the complaint (or contradiction) is the 'insurance' not that the credit is a deposit and has been issued by a bank.

Not all counterfeiting is illegal

The nature of fractional-reserve banking is that banks (and their customers) are able to inflate the money supply and increase nominal prices. There is a difference between broad money and narrow money and the difference is that broad money is issued by the (state-guaranteed) commercial banks unlike narrow money which comes from the central bank. Without the state guarantee the commercial banking sector would not be able to issue money because unfunded liabilities would have no value. It is because the government is standing behind the banks that their (excess) credit has value equal to that of normal money. So when a bank issues a loan (or a mortgage) new money is being created and the bank together with the customer is increasing the money supply. And because it is the customer who initiates this arrangement then it is they who are in fact causing inflation. This a legal form of counterfeiting and so then people who borrow money are counterfeiting the currency. So then is it not always illegal for citizens to counterfeit the currency they are able to do so when they get a loan from a (state-guaranteed) bank. Counterfeiting is not always illegal since it is legal to borrow money from insolvent (state-guaranteed) banks.

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.