If you know the bank is loaning out deposits, it's part of the contract between the depositor and the bank. How is this fraud? You're the one "contorting" things.
What I don't get is a a bunch of "anarchists" go around and act like it should be illegal to make this voluntary arrangement between depositor and bank. This is why I can't take Rothbard seriously... well one of the reasons.
He claims that in this utopian "anarcho-capitalist" society, no one would do fractional reserve banking, but the only free market banking systems that ever existed were all very highly fractional reserve.
Then he basically says in a system with a government it should be illegal because it's "fraud", even though the bank isn't hiding the fact they loan out deposits from the depositor.
I don't know what else to do besides roll my eyes!
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