Fractional Reserve Banking and the creation of the Debtcoin

[Hawker]

...snip...

We've run the whole gamut with this already from Andrew Jackson days to 1913 when the cartel was made the official true monopoly in the form of the FED, continuing until now, where the government is pretty much a total tool of this cartel.

It happened in Europe in pretty much every country. It happened in the US. You can't deny it. It cannot not happen again if we start all over again with the same system.

I agree.  But I believe that its worth trying to regulate businesses in order to control the social costs of stupid failures.  Its why I am a statist.  Private enterprise is an engine of wealth and as such we all love it.  But wealth is not the only goal of society.  Things like fairness and justice matter as well.

[myrkul]

I'm saying if you have a free market providing FRB services, which produces usable money in the form of notes and accounting entries on reserves, the vendors in this market who happen to be idiots or unlucky or victims will issue too many notes and suffer panics on reserves and therefore become absorbed or merged or bought by another FRB.

One question:

What would motivate a large bank to buy the debt of a smaller one? They might buy up the assets (brick and mortar buildings, etc), and certainly that might be used to pay back the remaining outstanding debts, but the out of business bank will not be "merged," it will sell off whatever it can, and then fade into history.

This process happens over and over and over and over until there are only a very few big players with all the reserves all pooled up in just a few places. They then cartelize. When a cartel in something as important as creating the money supply gets big enough, it starts influencing the government.

And let's assume that that's exactly what happens: All the other banks suffer runs because they were stupid, and their assets are picked up by one big bank - or a cartel - that does a lot of business. Without the government to influence, what harm can they do?

[townf]

What would motivate a large bank to buy the debt of a smaller one? They might buy up the assets (brick and mortar buildings, etc), and certainly that might be used to pay back the remaining outstanding debts, but the out of business bank will not be "merged," it will sell off whatever it can, and then fade into history.

The customer base. The surviving bank will acquire all the failed bank's customers. The customers aren't going anywhere. They're still going to need somewhere to put their gold, btc, grain, whatever the reserves are.

And let's assume that that's exactly what happens: All the other banks suffer runs because they were stupid, and their assets are picked up by one big bank - or a cartel - that does a lot of business. Without the government to influence, what harm can they do?

But in reality right now, there is a government.

But let's just say there isn't one.

Currently the government is this: It is a giant bedsheet with obama's mug painted on it covering a bunch of rhinoseruses that are a little too close to joe shmoe. The harm that these animals can do without a government is about the same as it is now, but without the bedsheet draped over them.

[myrkul]

What would motivate a large bank to buy the debt of a smaller one? They might buy up the assets (brick and mortar buildings, etc), and certainly that might be used to pay back the remaining outstanding debts, but the out of business bank will not be "merged," it will sell off whatever it can, and then fade into history.

The customer base. The surviving bank will acquire all the failed bank's customers. The customers aren't going anywhere. They're still going to need somewhere to put their gold, btc, grain, whatever the reserves are.

So, the successful banks should not be rewarded for their wise policies in not putting out too many notes?

And let's assume that that's exactly what happens: All the other banks suffer runs because they were stupid, and their assets are picked up by one big bank - or a cartel - that does a lot of business. Without the government to influence, what harm can they do?

But in reality right now, there is a government.

Yes, but you postulated a free market system.

Tell me, how exactly would a huge bank harm the public?

[townf]

But if you could magically create a situation with no government like through armageddon or something, then a new "government" would arise and it would entity forcing a the security equilibrium achieved after at least a little bit of "squabbling".

The ones simply with the ability to put a stop to the squabbling is the "government". They would basically have a monopoly on the use of force. You would not have anything less than this, due to nature of human/animal hierarchical social structures.

This "government" entity is the kernel of the thing that would ultimately get hijacked by a money monopoly, unless it itself is a money monopoly, if there even is a money monopoly

[townf]

So, the successful banks should not be rewarded for their wise policies in not putting out too many notes?

I don't think so, if it ultimately means oppressing everybody.

Tell me, how exactly would a huge bank harm the public?

The same way it does now

[myrkul]

The ones simply with the ability to put a stop to the squabbling is the "government". They would basically have a monopoly on the use of force. You would not have anything less than this, due to nature of human/animal hierarchical social structures.

You do understand that the concept of a monopoly on force is only as old as Machiavelli?

Market law and rights protection would do a hell of a lot better job than a monopoly.

Tell me, how exactly would a huge bank harm the public?

The same way it does now

By influencing the government? What government?

[townf]

The ones simply with the ability to put a stop to the squabbling is the "government". They would basically have a monopoly on the use of force. You would not have anything less than this, due to nature of human/animal hierarchical social structures.

You do understand that the concept of a monopoly on force is only as old as Machiavelli?

Market law and rights protection would do a hell of a lot better job than a monopoly.

Tell me, how exactly would a huge bank harm the public?

The same way it does now

By influencing the government? What government?

Sorry, see my post #25 for my reply to these questions. I would say it is older than Machiavelli. Also i want to point out that there are other markets with their potential monopolies other than money creation that are powerful enough to influence "government", them being energy, food supply, water supply. They are the other rhinosceroses (sp?). You might could say government is a collection of all these including armed force. It can't ever be totally free due to animal social structure. I'm not a sociologist or a biologist, just my opinion.

[myrkul]

I would say it is older than Machiavelli.

You could say that, but you would be wrong.

https://mises.org/document/1092/Myth-of-National-Defense-The-Essays-on-the-Theory-and-History-of-Security-Production

[townf]

I would say it is older than Machiavelli.

You could say that, but you would be wrong.

https://mises.org/document/1092/Myth-of-National-Defense-The-Essays-on-the-Theory-and-History-of-Security-Production

But not de facto wrong. Groups had effective monopolies on force before machiavelli, he just merely observed the phenomenon and explained it, he didn't invent monopolies on force, is all i'm saying. I haven't read the link yet.

[myrkul]

And just in case you won't believe Hoppe, here's a mainstream historian:

The State is not an eternal and unchanging element in human affairs. For most of its history, humanity got by (whether more happily or not) without a State. For all its universality in our times, the State is a contingent (and comparatively recent) historical development. Its predominance may also prove to be quite transitory. Once we have recognized that there were societies before the State, we may also want to consider the possibility that there could be societies after the State.

The Modern State, Routledge, second edition 2004, page 27

[townf]

And just in case you won't believe Hoppe, here's a mainstream historian:

The State is not an eternal and unchanging element in human affairs. For most of its history, humanity got by (whether more happily or not) without a State. For all its universality in our times, the State is a contingent (and comparatively recent) historical development. Its predominance may also prove to be quite transitory. Once we have recognized that there were societies before the State, we may also want to consider the possibility that there could be societies after the State.

The Modern State, Routledge, second edition 2004, page 27

Man, I want to believe him, hopefully he is correct.

However, if state is defined as simply the people who can successfully keep internal fighting and feuding down at an acceptable level, i could go for that. "State" concurrently being a synonym for "equilibrium" isn't a coincidence.

[myrkul]

And just in case you won't believe Hoppe, here's a mainstream historian:

The State is not an eternal and unchanging element in human affairs. For most of its history, humanity got by (whether more happily or not) without a State. For all its universality in our times, the State is a contingent (and comparatively recent) historical development. Its predominance may also prove to be quite transitory. Once we have recognized that there were societies before the State, we may also want to consider the possibility that there could be societies after the State.

The Modern State, Routledge, second edition 2004, page 27

Man, I want to believe him, hopefully he is correct.

However, if state is defined as simply the people who can successfully keep internal fighting and feuding down at an acceptable level, i could go for that. "State" concurrently being a synonym for "equilibrium" isn't a coincidence.

Now, can you imagine a "Market State?" One where the service of keeping internal fighting to a minimum is provided by competing businesses, instead of a violent monopoly?

[townf]

Now, can you imagine a "Market State?" One where the service of keeping internal fighting to a minimum is provided by competing businesses, instead of a violent monopoly?

Meh, i want to. I'm totally down with that action, but the word croneyism keeps popping up in my mind, or "cloak and dagger", or the mutual scratchings of backs. And "eliminating the competition", and "human nature".

We could do orders of magnitude better than now though, im not trying to pee on everything. Tools would help, like the decentralized crypto reserve note issuing tool i keep harping on about...

[crumbcake]

And just in case you won't believe Hoppe, here's a mainstream historian:

The State is not an eternal and unchanging element in human affairs. For most of its history, humanity got by (whether more happily or not) without a State. For all its universality in our times, the State is a contingent (and comparatively recent) historical development. Its predominance may also prove to be quite transitory. Once we have recognized that there were societies before the State, we may also want to consider the possibility that there could be societies after the State.

The Modern State, Routledge, second edition 2004, page 27

Man, I want to believe him, hopefully he is correct.

However, if state is defined as simply the people who can successfully keep internal fighting and feuding down at an acceptable level, i could go for that. "State" concurrently being a synonym for "equilibrium" isn't a coincidence.

Now, can you imagine a "Market State?" One where the service of keeping internal fighting to a minimum is provided by competing businesses, instead of a violent monopoly?

I can also imagine a Christian utopia (random pick, not starting a religious debate), the problem's the same as with your "Market State" -- one never existed, too many snags...  And as far as payoff goes, you know which one i'd choose.

[myrkul]

Now, can you imagine a "Market State?" One where the service of keeping internal fighting to a minimum is provided by competing businesses, instead of a violent monopoly?

Meh, i want to. I'm totally down with that action, but the word croneyism keeps popping up in my mind, or "cloak and dagger", or the mutual scratchings of backs. And "eliminating the competition", and "human nature".

Interestingly, human nature actually works in our favor, with the market. Ask Adam Smith and John Nash.

I can also imagine a Christian utopia (random pick, not starting a religious debate), the problem's the same as with your "Market State" -- one never existed, too many snags...  And as far as payoff goes, you know which one i'd choose.

That's where you're wrong. The market has provided security before. Ireland. Iceland.

[crumbcake]

Now, can you imagine a "Market State?" One where the service of keeping internal fighting to a minimum is provided by competing businesses, instead of a violent monopoly?

Meh, i want to. I'm totally down with that action, but the word croneyism keeps popping up in my mind, or "cloak and dagger", or the mutual scratchings of backs. And "eliminating the competition", and "human nature".

Interestingly, human nature actually works in our favor, with the market. Ask Adam Smith and John Nash.

I can also imagine a Christian utopia (random pick, not starting a religious debate), the problem's the same as with your "Market State" -- one never existed, too many snags...  And as far as payoff goes, you know which one i'd choose.

That's where you're wrong. The market has provided security before. Ireland. Iceland.

I'm not sure i see your point.  Are you saying Ireland and Iceland are currently what you would call a "Market State"?

[myrkul]

I'm not sure i see your point.  Are you saying Ireland and Iceland are currently what you would call a "Market State"?

No, I am not. You said that they had never existed, and I countered with two historical examples, which, for the record, both lasted longer than the current US slide into oblivion. (Iceland ~330 years, Ireland ~1000)

[crumbcake]

I'm not sure i see your point.  Are you saying Ireland and Iceland are currently what you would call a "Market State"?

No, I am not. You said that they had never existed, and I countered with two historical examples, which, for the record, both lasted longer than the current US slide into oblivion. (Iceland ~330 years, Ireland ~1000)

I'm still not sure what you're saying.  Could you tell me when?
Edit:  Perhaps i'm assuming too much & you are using "Market State" as a specific econo-political term & not in the general sense?  As used by Phillip Bobbitt??  Just point me in the right direction.

[myrkul]

I'm not sure i see your point.  Are you saying Ireland and Iceland are currently what you would call a "Market State"?

No, I am not. You said that they had never existed, and I countered with two historical examples, which, for the record, both lasted longer than the current US slide into oblivion. (Iceland ~330 years, Ireland ~1000)

I'm still not sure what you're saying.  Could you tell me when?

Google. It's your friend.
http://en.wikipedia.org/wiki/Icelandic_commonwealth
https://www.youtube.com/watch?feature=player_embedded&v=ZZi45Mf6jYY

Oh, and by the way:
http://en.wikipedia.org/wiki/Xeer