If the people know the bank is loaning out their deposits and that's part of the contract, how can you call this fraud? You just sound like someone who wants to interfere in a voluntary contract because you don't like fractional reserve!
How is it a ponzi without a central bank? Without a central bank the bank cannot loan out more than it has in deposits or it would go under overnight due to clearing debts it could not settle.
You don't NEED a bank to make investments with risk, but it certainly makes it a lot easier for the average person and it also would be a reduction in efficiency if you were to do away with them. Basically banks wouldn't even exist if they were 100% reserve, they would serve no other function than as to be a warehouse. Who would make loans? Most individuals don't feel like going through the trouble, which is the purpose of a bank. They make loans with the deposits they get to fund those who would want a loan to purchase a house or start a business. Then the bank makes a profit and the depositor gets interest on their deposits. They also get the convenience of using a bank. If banks didn't loan out their deposits the amount of credit available for people to buy a house with or start a business would be greatly reduced and the efficiency of the system would suffer.
This comment by Selgin pretty much sums up the main issue with your arguments:
"in the Scottish system, which was free in all respects pertaining to this issue, no 100% banks operated; nor did 50% banks, or even 20% banks. The universal preference was for banks that made due with the very narrowest cash reserves, but with plenty of capital. True enough, some banks were more risky than others, but that was a matter, not of very different cash reserve ratios, but of different degrees of capitalization and different sorts of non-cash assets."
How come every time in history there has been a mostly free market in banking no 100% reserve banks ever existed?
Also in a free banking system banks don't create money, but rather they issue bank notes which are like modern day checks. They just aren't made out to any specific person and can be used like currency is now. But when the banks settle with each other it would be like they were settling personal checks written by each other's customers. They don't "create money" without a central bank.
You don't seem to even grasp the most basic aspects of a free banking system, you just repeat the SOS and have your friends upvote you as if you've espoused some sort of great wisdom when historically there's no evidence that in a free market banking system consumers would go for 100% reserve banks as that isn't what the consumer has ever demanded.
You just go around slinging the words "fraud" and "ponzi" incorrectly as if this is some sort of argument.
Of course, I don't expect a well reasoned response, just more downvotes from silent people who can't even back up their own position or even be bothered to respond at all, which is the main reason why I have very little respect for most of this site and why I pretty much gave up on it forever ago. It isn't about debate, it's about upvoting and downvoting stuff you "like" or "don't like". It's not debate, it's "whose opinion is more popular".
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