The problems in banking are caused by the government

If the reason for the existence and value of fiat currencies is not taxation then the reason (for its value) is none other than arbitrary fashion. If that is the case then the only reason to value (unbacked) bank credit is not taxation but knowledge of the ability of the government to make good on all promises, by printing more money.

Whether the reason for the value of fiat is taxation or simply fashion, it is still true that the government guarantee of bank deposits is meaningful in either case. It is for no other reason than the government guarantee that the bank deposits are valued, not because the banks are trusted, but because the government is trusted. Bank deposits are valuable or the government have lied. If the government did not want to make bank deposits valuable, there is no method by which the banks could make them valuable, they are too far into a bankruptcy situation to recover their losses. Without the government the banks would be bankrupt, it is only government support which keeps them from failing altogether. Without the government there would be no serious problem with banking.

There is no forfeit for banks if they increase the money supply

Money is not printed exclusively by the government. Commercial banks are allowed to print money. The shocking part (as far as ethics is concerned) is not strictly that banks print money (it is not the fault of the banks, that they do this) more alarming is that they are permitted to do this by the government.

Money is no more than a government promise and since bank liabilities are guaranteed by the government then banks are allowed to print money.

The law should be immune from elections

The outcome of an election is often the excuse given for tyranny. But only a bigot would think that an opinion being popular verifies it.

Elections are often a tool used to punish those who anger us by contradicting us. But we have no right to such a tool. Elections are the crime of using force of popularity to impose rules which would otherwise not stand.

Eventually all fiat currencies will disappear

Eventually under a fiat currency regime the government will not be able to create sufficient demand for it to retain value, since it loses value over time and is inherently worthless.

Fiat currencies will eventually lose value entirely if they continue to be inflated. People will ‘move on’ and decide to use something else as a store of value, if they even need a store of value.

Banks should not be permitted to trade if they are insolvent

Only institutions that do not have credit guaranteed by the taxpayer should have the right to lend customer deposits. If the credit is guaranteed by the taxpayer all assets of the company should be seized and the firm wound down and closed.

A company that has credit guaranteed by the taxpayer should not be permitted to continue as a going concern.

Banks should not be allowed to lend deposits by the government

With state-endorsed Frb the bank can claim that to retain the customer deposits was never part of the contract, due to the deposit insurance. It is true, however, that we are not given back the same note which was deposited in the first place. When a bank relends the money other people get the advantage of it, often without our permission.

Banks should not be given permission to relend customer’s deposits.

Bad firms must be allowed to fail otherwise inflation will happen

Nothing more is required than deposit insurance to enable banks to inflate the money supply, fiat money is nothing more than state credit. We value fiat currency out of necessity not infatuation, it has value for no other reason than the state. Only if the currency is valued for its own sake (like a commodity currency) would the deposit insurance (of banks) be meaningless, or not a threat, because it could not be validated by the state, they would be unable to pay and so money would not be created.

Deposit insurance is not benign (immaterial to the money supply) because the state is feared. The money supply is not independent of deposit insurance. Sound money relies upon bad firms (and their credit) being allowed to fail. Inflation happens when bad firms are not allowed to fail.