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Ron Paul’s Fractional Reserve Banking Congressional Hearing – June 28 2012

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It is not advocating frb

That is his point

i guess I am sorry though. I

i guess I am sorry though. I can't find a quote which says "I, Ludwig von Mises, duly swear that I advocate free banking."


it explains that free banking

it explains that free banking is the most efficient form of banking. Free banking can be refereed to a system where there is no reserve requirement. Or it could be said to be a system of 0% "fractional" reserve banking. Theoretically, bank notes can be printed forever in this system, to infinity. In practice, banks hold a very high percentage of cash to deposits in the bank in order to keep a sense of calm in the minds of their depositors who are able to see the vaults. When I say bank notes, I do not mean dollars or FRNs. I literally mean a note with the bank's seal of authenticity. So when bank A prints infinity bank notes, they are the only bank that gets screwed. And theirs are the only depositors who get screwed because the inflation only happens in terms of their bank note.


You should just make your own post...

With the links to quotes from Mises instead of trying to argue with this guy who can't seem to get the difference between communism and libertarianism.

i just didnt want him to get

i just didnt want him to get the last word in here


It is true, but it is also

It is true, but it is also misleading. To your point, they have the excess reserves because the Fed is paying them interest to keep excess reserves


Fractional Reserve Banking

Yes. The Fed pays 0.25% over night on $1.4 Trillion in excess reserves held on account at the fed by commercial banks. Do you think that these banks would be content to earn 0.25% from the fed if they could earn a higher rate of return from commercial borrowers....WHO ARE CREDIT WORTHY? The private sector is all caught up in trying to de-leverage household balance sheets, which in part explains why we remain mired in a liquidity trap.

Ed Rombach

maybe they are credit worthy.

maybe they are credit worthy. that doesnt mean they want a loan at .25. A lot of them might want it at even less. And its a much bigger game for the cartel. As like when OPEC constricts supply to keep prices up, so too does the banking cartel restrict supply in order to keep the price of money up.


Fractional Reserve Banking

Exactly my point. There are many households and businesses that are credit worthy but do not want to borrow because they want to deleverage their balance sheets. Meanwhile, large corporations have already deleveraged and are sitting on $2 Trillion in cash with pristine balance sheets. All the Fed QE1 & QE2 Treasury purchases transferred roughly $1.6 Trillion of cash reserves to banks but virtually all that money simply comes back to the Fed and pools as excess reserves. During the past few years the Fed has been earning about $80 billion per year in interest earnings from these Treasury holdings, which they then remit back to the Treasury. Note the circular nature of the interest payments from Treasury to Fed then back to Treasury. This is why Ron Paul has made the case for why the $1.6 Trillion of Treasury debt held by the Fed should not be counted as it applies to the debt ceiling. It would not be a permanent solution, but it would buy time for policy makers to arrive at a more sensible solution to the fiscal cliff the country is facing at the end of this year.

Ed Rombach

you assume people will always

you assume people will always leave all of their money in the bank, and you assume that there has to be only one monopolistic note which can be exchanged at one monopolistic banking system for said gold. You also assume business would only accept the note. The note is never as good as the gold, but the businesses are free to accept the note, accept the gold, accept either, or accept none.


Fractional Reserve Banking is Fraudulent - Ron Paul

"Look into whether or not we should have fractional reserve banking. Yes, you have the Fed creating money out of thin air, but then this is magnified by fractional reserve banking, which is really fraudulent."


Fraud was never debated at

Fraud was never debated at the hearing. The page you reference is a simplistic analogy to feed the layman, and never mentions that there are different kinds of fractional reserve banking. Specifically, it never mentions 'free banking.'


“De Soto begins with a summary of the Austrian theory of the monetary system. He begins with Rothbard's position: 100% reserve banking. This means that banks may not legally issue warehouse receipts to gold or silver that they do not have in storage. They may not legally issue checks for more money than they have as deposits.

“This restriction is opposed in theory to the rule proposed by Ludwig von Mises. Mises believed in free banking. He did not believe that the government should establish any reserve requirement for the commercial banks, because he did not trust the government to make a judicial ruling that would apply to all banks. He did not trust politicians' ability to make a judgment regarding the correct percentage. He believed that the banking system, through competition, and through the enforcement of contracts, would establish the proper reserve ratio.

“Rothbard promoted 100% reserve banking. But there is something that is never mentioned by the Rothbardians in relation to banking: Rothbard was an anarchist. He did not believe that the state should even exist. Therefore, in his ideal banking system, it is impossible for the state to impose a 100% reserve requirement, because there is no state. There is no agency with the legal right to send an agent with a badge and a gun to tell a banker how much gold or silver he should have in reserve for accounts.

“This means that, in practice, Mises's system of free banking is the operational standard for those people who are followers of Rothbard on the issue of banking and civil government. If there is no state to impose 100% reserve banking, then the system must operate in terms of a market-enforced banking system. While the two systems are opposed in theory, they would be the same in practice.”


You might as well give it up...

This site is now in the control of a few trolls and a bunch of gullible idiots.

They're being polite

Did you know that politics happen in the Capitol?

Did you know that I posted

Did you know that I posted even more pertinent information that that below? Or does politics happen here too.


I know you're a troll

That's all I need to know.

he said she said i am rubber

he said she said i am rubber and you are glue


You're re-quoting a "missive" from Gary North

And trying to deceive people that it's from LRC.

ok i take back that it wasn't

ok i take back that it wasn't from lew rockwell. never minding that, the principle of free banking stands as equally libertarian, if not more libertarian than 100% RB







the extra people coming in

the extra people coming in with - votes either shows the OP is willing to stoop to cloning his account and trolling, or that you guys won't engage in thoughtful discourse while at the same time not understanding the debate and goading on a guy that 'sounds' like what you've heard in passing.



This site isn't about debate anymore, the real trolls (not you) are just restating the same things over and over without ever actually responding to any of your arguments...

Just give it up... I wasted hours the other week... hours I'll never get back arguing with people here and while I might have woken a few people up... when you have a sticky like this on the front page... seriously... I don't know why I even bothered. I wish I hadn't.

This the video title and OP's subject is entirely misleading and the people arguing against you need to watch this video on Ron Paul's own youtube channel. I bet "We the People" didn't even watch 20-21 mins or so in where guy is explaining it isn't so much fractional reserve banking, but rather the central bank and the FDIC.

Those arguing against you, need to watch this:

I also really think having Ron Paul's image on this site... saying it is inspired by him... will only tarnish Ron Paui's legacy.

This movement is dead, and it will be destroyed from within, not even from within Ron Paul's campaign, but from within his army of supporters, where a good 30% of them (the most emotional ones), act like nothing more than a bunch of left wing dipshits who can do nothing but reinforce each other's opinion without actually ever being able to make a coherent argument.


I screwed this up a bit... I meant to say...

"The video's *title* and OP's subject are pretty misleading"..

And that "We The People" needs to watch OP's linked video for the 20-30 mins mark where he explains the problem isn't fractional reserve banking, but the federal reserve bank and the FDIC.

And that the video I've linked to before which is on Ron Paul's youtube channel also, is a much better educational tool:


Sorry, I've been up all night... and I'm so tired of arguing with people who can't even form a coherent debate whatsoever and who can do nothing but downvote someone's comments without actually making a logical rebuttal.

Whatever the Fed counterfeits the banks multiply by 10

Through fractional reserve fraud. Clearly, fractional reserve fraud is major part of the problem.

How many times are you going to ask, and have me tell you that I've watched the entire video? Maybe you should watch the entire video, or watch it again;

Why do you continually refer to the third testimony by Dr. White, who is the least Austrian, least libertarian, least free market, and least pro sound money out of the three?

If you're a defender of "free banking" you should be referring to the first testimony from Dr. Salerno, who offers the most free market testimony, which is largely in agreement with Dr. Paul and Rothbard. He only stops short of directly pointing out that FRB is fraud, which I'm sure he's doing for the sake of argument.

Obviously you don't get it.

if you're so right, why do

if you're so right, why do you resort to empty rhetoric like 'fractional reserve fraud' and why dont you go point by point with an argument rather than retreating back to the vaguely complex situation we have today, rather than push forward with what FRB actually is in itself.


how could you know if you

how could you know if you never tried


Your comments are wrong and bad

The video is good.

"Your opinion is wrong and bad"

Wow... that's a great argument... *rolls his eyes*

Did you even watch the video past the 20 min mark, or does your attention span not last that long?

I never criticized the video, only the video's title.