Fractional Reserve Lending IS NOT bad - its unavoidable

[NotLambchop]

...
who said i agree for the bank to take my money and invest it.

You did, when you deposited your money.

not only did the bank invest my money i don't get anything in return for the risk.

Sure you did, do you think the bank and its employees should work for free?  Not only do you get the services, you usually get a bit of interest to sweeten the deal

if ill want to invest my money ill invest it myself, the bank has no right investing my money while still claiming its in my account.

See above.  And read up on money.

[Robert Paulson]

...
who said i agree for the bank to take my money and invest it.

You did, when you deposited your money.

not only did the bank invest my money i don't get anything in return for the risk.

Sure you did, do you think the bank and its employees should work for free?  Not only do you get the services, you usually get a bit of interest to sweeten the deal

if ill want to invest my money ill invest it myself, the bank has no right investing my money while still claiming its in my account.

See above.  And read up on money.

no one tells you how banking works when you open a bank account, 99% of the public is unaware of what is really happening when they deposit their money in the bank.
the bank should obviously be paid for its services, and it should tell me exactly the price so that i can decide if i want to use their service or go to another bank, needless to say this does not happen.
finance is a hobby of mine and i've been studying monetary systems for years, FRB is a fraud.
if taking your depositors money and investing it without telling them for your own personal profit is not fraud then i don't know what is.

[NotLambchop]

...
no one tells you how banking works when you open a bank account, 99% of the public is unaware of what is really happening when they deposit their money in the bank.

The butcher doesn't explain to you where meat comes from, the baker doesn't tell you how bread is made.  Why should a bank explain to you what it does with your money?  Take some responsibility for yourself.  I'm sure a teller will explain the basics to you if you ask her nicely.

the bank should obviously be paid for its services, and it should tell me exactly the price so that i can decide if i want to use their service or go to another bank, needless to say this does not happen.

That is the most unjustifiably entitled thing I've read today.  See above.

finance is a hobby of mine and i've been studying monetary systems for years, FRB is a fraud.

A finance hobbyist is as useful and worthy as an amateur brain surgeon, which is to say "be careful, bro."

if taking your depositors money and investing it without telling them for your own personal profit is not fraud then i don't know what is.

There's still time to learn.  Adult education is a thing.

[Ozziecoin]

FRB without regulation -- recipe for disaster.  Works just fine with regulation, though.  100% of the world's economy runs on fiat and FRB.

Well, you seemed to have forgotten the S&L crisis in the 1980s, and 2008 of course. Regulation is not a solution. In fact, it is part of the problem because it gives an illusion of security and it promotes risky behavior.

I'm not convinced that FRB is a good thing, but I don't think it is as evil as the conspiracy nuts claim. The advantage is increased availability of money for investment, leading to higher productivity and growth. The disadvantage is increased risk of failure. So far it has been a net positive, but the story is not over yet.

FRB also increases the wealth divide. It promotes aristocracy and not meritocracy.

[Ozziecoin]

...
no one tells you how banking works when you open a bank account, 99% of the public is unaware of what is really happening when they deposit their money in the bank.

The butcher doesn't explain to you where meat comes from, the baker doesn't tell you how bread is made.  Why should a bank explain to you what it does with your money?  Take some responsibility for yourself.  I'm sure a teller will explain the basics to you if you ask her nicely.

the bank should obviously be paid for its services, and it should tell me exactly the price so that i can decide if i want to use their service or go to another bank, needless to say this does not happen.

That is the most unjustifiably entitled thing I've read today.  See above.

finance is a hobby of mine and i've been studying monetary systems for years, FRB is a fraud.

A finance hobbyist is as useful and worthy as an amateur brain surgeon, which is to say "be careful, bro."

if taking your depositors money and investing it without telling them for your own personal profit is not fraud then i don't know what is.

There's still time to learn.  Adult education is a thing.

Looks like someone works for a bank.

[NotLambchop]

FRB without regulation -- recipe for disaster.  Works just fine with regulation, though.  100% of the world's economy runs on fiat and FRB.

Well, you seemed to have forgotten the S&L crisis in the 1980s, and 2008 of course. Regulation is not a solution. In fact, it is part of the problem because it gives an illusion of security and it promotes risky behavior.

I'm not convinced that FRB is a good thing, but I don't think it is as evil as the conspiracy nuts claim. The advantage is increased availability of money for investment, leading to higher productivity and growth. The disadvantage is increased risk of failure. So far it has been a net positive, but the story is not over yet.

FRB also increases the wealth divide. It promotes aristocracy and not meritocracy.

Nah.  Money increases the wealth divide.  FRB is the way money works today.  No exceptions.  ...well, occasional fuqups like Pirate S&L, BitFunder and NeoBee. <==meritocracies immune to failure
Build an economy that works without FRB, then preach to me about economics.

P.S:  No, I do not work for a bank.

[Ozziecoin]

FRB without regulation -- recipe for disaster.  Works just fine with regulation, though.  100% of the world's economy runs on fiat and FRB.

Well, you seemed to have forgotten the S&L crisis in the 1980s, and 2008 of course. Regulation is not a solution. In fact, it is part of the problem because it gives an illusion of security and it promotes risky behavior.

I'm not convinced that FRB is a good thing, but I don't think it is as evil as the conspiracy nuts claim. The advantage is increased availability of money for investment, leading to higher productivity and growth. The disadvantage is increased risk of failure. So far it has been a net positive, but the story is not over yet.

FRB also increases the wealth divide. It promotes aristocracy and not meritocracy.

Nah.  Money increases the wealth divide.  FRB is the way money works today.  No exceptions.  ...well, occasional fuqups like Pirate S&L, BitFunder and NeoBee. <==meritocracies immune to failure
Build an economy that works without FRB, then preach to me about economics.

P.S:  No, I do not work for a bank.

The blockchain buddy. That's the solution right there.

FRB increases the wealth divide because it creates money out of thin air.

[hccwin]

It's fraud because you're lending out money that you're also making available for withdrawl simultaineously. If too many people exercise their rights to deposits the whole system falls apart, That's exactly like a Ponzi.

[CoinCube]

theonewhowaskazu

The three links below are my rebuttal to your argument. I believe they convincingly demonstrate that you are completely and utterly mistaken.

Finance Part I: Understanding the Parasite
Finance Part II: The Parasitic Cycle
Finance Part III: Divide, Conquer, Enslave

[NotLambchop]

...
FRB increases the wealth divide because it creates money out of thin air.

And bitcoin is created out of???
And no, FRB does not create money out of thin air.
And no, FRB does not increase the wealth divide.  Money increases the wealth divide.  Non-inflationary money like Bitcoin [will eventually become] maintains the wealth divide.  Hoarders increase the wealth divide.  Greed increases the wealth divide.  Money revolutionaries like Danny Brewster, who  praise your pseudo-liber notions to rob you, as well as people who get robbed by the likes of him, increase the wealth divide.

FRB doesn't even rank, let's stop repeating nonsense.

[CoinCube]

...
FRB increases the wealth divide because it creates money out of thin air.

And bitcoin is created out of???
And no, FRB does not create money out of thin air.
And no, FRB does not increase the wealth divide.  Money increases the wealth divide.  Non-inflationary money like Bitcoin [will eventually become] maintains the wealth divide.  Hoarders increase the wealth divide.  Greed increases the wealth divide.  Money revolutionaries like Danny Brewster, who  praise your pseudo-liber notions to rob you, as well as people who get robbed by the likes of him, increase the wealth divide.

FRB doesn't even rank, let's stop repeating nonsense.

Bitcoin is created out of Work

Bitcoin's non-inflationary property is not a problem because the very fact that it is non-inflationary will result in bitcoin eventually losing market share to some future superior cryptocurrency that has some built in inflation. Bitcoin thus won't increase or maintain the wealth divide because it is only the beginning of something better.

FRB does effectively create money out of thin air. The posters up-thread describing it as fraud are correct. See the links to my posts on Finance linked above for a detailed analysis of this point.

[Ozziecoin]

...
FRB increases the wealth divide because it creates money out of thin air.

And bitcoin is created out of???
And no, FRB does not create money out of thin air.
And no, FRB does not increase the wealth divide.  Money increases the wealth divide.  Non-inflationary money like Bitcoin [will eventually become] maintains the wealth divide.  Hoarders increase the wealth divide.  Greed increases the wealth divide.  Money revolutionaries like Danny Brewster, who  praise your pseudo-liber notions to rob you, as well as people who get robbed by the likes of him, increase the wealth divide.

FRB doesn't even rank, let's stop repeating nonsense.

Relax mate or you're going to get an aneurysm.  Bitcoin has the blockchain mate.  If on the Blockchain = money.  Not on the Blockchain = not money.

FRB creates money out of thin air.  Totally.  Even the central bankers admit that: https://bitcointalk.org/index.php?topic=602739.msg6653996#msg6653996

The FRB makes everyone without assets poorer, increasing the wealth divide: http://ozziecoin.com/index.php/fractional-reserve-banking-explained/  It's sad but totally true.

Charlatans will always exist, but the biggest thieves by far wear suits:  http://www.ritholtz.com/blog/2014/05/6-years-after-financial-crisis-big-banks-are-still-committing-big-crimes/

[NotLambchop]

...
Relax mate or you're going to get an aneurysm.  Bitcoin has the blockchain mate.  If on the Blockchain = money.  Not on the Blockchain = not money.

I'm about as relaxed as I get without the aid of heavy recreational chemistry.
Now explain to me how the blockchain bit helped NeoBee "investors"?  Or how it helped Ukyo's depositors/investors?  Or how it helped Pirateat40's depositors/investors?  Or Patrick Harnett's depositors/investors? 

FRB creates money out of thin air.  Totally.  Even the central bankers admit that: https://bitcointalk.org/index.php?topic=602739.msg6653996#msg6653996

And bitcoin is created out of???  And why are you linking me to a bitcointalk topic like it's a primary source?  Say it in your own words, bro.

The FRB makes everyone without assets poorer, increasing the wealth divide: http://ozziecoin.com/index.php/fractional-reserve-banking-explained/  It's sad but totally true.

I assume it's your blog and you're quoting yourself?  No shortage of humility here   Anyhow, no.  You're wrong.  Repeating yourself and linking to your blog (I assume it's your blog) only adds extra lulz.

Charlatans will always exist, but the biggest thieves by far wear suits:  http://www.ritholtz.com/blog/2014/05/6-years-after-financial-crisis-big-banks-are-still-committing-big-crimes/

Sure bro, there are plenty of scams in fiat world.  When 95% of banks simply walk away with *all of your money*, fiat banking would descend to where Bitcoin finance is now.
And you would have the beginnings of a point.

[Ozziecoin]

...
Relax mate or you're going to get an aneurysm.  Bitcoin has the blockchain mate.  If on the Blockchain = money.  Not on the Blockchain = not money.

I'm about as relaxed as I get without the aid of heavy recreational chemistry.
Now explain to me how the blockchain bit helped NeoBee "investors"?  Or how it helped Ukyo's depositors/investors?  Or how it helped Pirateat40's depositors/investors?  Or Patrick Harnett's depositors/investors? 

FRB creates money out of thin air.  Totally.  Even the central bankers admit that: https://bitcointalk.org/index.php?topic=602739.msg6653996#msg6653996

And bitcoin is created out of???  And why are you linking me to a bitcointalk topic like it's a primary source?  Say it in your own words, bro.

The FRB makes everyone without assets poorer, increasing the wealth divide: http://ozziecoin.com/index.php/fractional-reserve-banking-explained/  It's sad but totally true.

I assume it's your blog and you're quoting yourself?  No shortage of humility here   Anyhow, no.  You're wrong.  Repeating yourself and linking to your blog (I assume it's your blog) only adds extra lulz.

Charlatans will always exist, but the biggest thieves by far wear suits:  http://www.ritholtz.com/blog/2014/05/6-years-after-financial-crisis-big-banks-are-still-committing-big-crimes/

Sure bro, there are plenty of scams in fiat world.  When 95% of banks simply walk away with *all of your money*, fiat banking would descend to where Bitcoin finance is now.
And you would have the beginnings of a point.

Reading the links would really help you mate.  But that's ok.  I'll do it in my own words:

The people that invested in the fraudulent stuff in bitcoin made one of two errors.  1. They trusted people they shouldn't have trusted, and gave money to those fraudsters.  2. And this is the biggest mistake.  They leave bitcoin on exchanges and other services that use off Blockchain transactions. 

They swapped real bitcoins for fake bitcoins.  Bad move.

Banks are worse than all the above because they just make more money out of nothing.  It steals money from you without even realising it. It's the biggest heist ever. 

Inflation steals from everyone.  But it's worse than that - rising property prices steal from the young and disadvantaged people.

[NotLambchop]

...
FRB increases the wealth divide because it creates money out of thin air.

And bitcoin is created out of???
And no, FRB does not create money out of thin air.
And no, FRB does not increase the wealth divide.  Money increases the wealth divide.  Non-inflationary money like Bitcoin [will eventually become] maintains the wealth divide.  Hoarders increase the wealth divide.  Greed increases the wealth divide.  Money revolutionaries like Danny Brewster, who  praise your pseudo-liber notions to rob you, as well as people who get robbed by the likes of him, increase the wealth divide.

FRB doesn't even rank, let's stop repeating nonsense.

Bitcoin is created out of Work

Created out of work?   WTF does that mean?  Then FRB loans are created out of work.  Or unicorn farts.  Or any statement that is so structurally crippled it's not even wrong.

Bitcoin's non-inflationary property is not a problem because the very fact that it is non-inflationary will result in bitcoin eventually losing market share to some future superior cryptocurrency that has some built in inflation.

Non sequitur.

Bitcoin thus won't increase or maintain the wealth divide because it is only the beginning of something better.

It won't if it fails, it will if it succeeds.  Are you saying that the seeds of Bitcoin's destruction are an intrinsic part of Bitcoin?  That it is a planned failure, to be superseded by a better currency?

FRB does effectively create money out of thin air. The posters up-thread describing it as fraud are correct. See the links to my posts on Finance linked above for a detailed analysis of this point.

Does everyone here quote themselves?  No, you're wrong.  See my previous post

[twiifm]

Its no secret that banks create money from loans (out of thin air).  But they don't need FRB to do this, its just a balance sheet operation.  And the fact that they do this is NOT bad.  In most cases its done cause people need to borrow money.  The WORSE thing that can happen is if NOBODY is willing to borrow money and the economy comes screeching to a halt.

Read this article to understand how banks create money.  From the horses mouth.  http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

Now the idea that FRB creates inequality that's hogwash.  Inequality is a side effect of free market Capitalism.  The more money you have the harder it is for others to compete w you, every child who has played Monopoly understands this.  That's why in places like USA there are anti-trust regulations.  

I laugh at all the bitcoiner BS here.  They are all as greedy as any other Captitalist except they pretend to rail against the "1%" so they can lure the lemmings into driving up price of BTC.  If you are really concerned about inequality then you should spend your time figuring how to redirect money flow from rich to poor.  Not spew BS about how some banker is stealing your money.

Bitcoin is not the answer to any economic problems in the world.  It might become a useful tool to transmit money -- and that's all it'll ever be

[CoinCube]

Does everyone here quote themselves?  No, you're wrong.  See my previous post

Only people who value their time and don't like repeating themselves.
Read the posts I linked or don't I really don't care.

If you read them and still think I am wrong say so and why and I will respond.
Otherwise quite frankly you are not worth wasting my time on.

[NotLambchop]

...
Reading the links would really help you mate.  But that's ok.  I'll do it in my own words:

The people that invested in the fraudulent stuff in bitcoin made one of two errors.  1. They trusted people they shouldn't have trusted, and gave money to those fraudsters.  2. And this is the biggest mistake.  They leave bitcoin on exchanges and other services that use off Blockchain transactions. 

They swapped real bitcoins for fake bitcoins.  Bad move.

Lol, if everyone kept their money in their wallets and did absolutely nothing with it (didn't spend it, didn't invest it, literally did nothing with it), then any money would be just fine.  Unfortunately, money gets used -- it gets invested, it gets spent in transactions with virtual strangers, it gets used.  And that's where the blockchain has nothing to offer, and Visa, with its chargeback and government enforcement agencies hunting down and pwning crooks, has plenty.  See?

Banks are worse than all the above because they just make more money out of nothing.  It steals money from you without even realising it. It's the biggest heist ever.

No.  The biggest heist ever is when you give your money to your buddy Danny or Jon and he says okthxbi.

Inflation steals from everyone.  But it's worse than that - rising property prices steal from the young and disadvantaged people.

Ridiculous.  The young are more than compensated for inflation with rising wages.  Did you ever work?  Did you get raises?  Were you raises keeping up with inflation?  Or...

[NotLambchop]

Does everyone here quote themselves?  No, you're wrong.  See my previous post

Only people who value their time and don't like repeating themselves.
Read the posts I linked or don't I really don't care.

If you read them and still think I am wrong say so and why and I will respond.
Otherwise quite frankly you are not worth wasting my time on.

In that case don't shit up this thread with your posts.  You cite yourself as a primary source -- only on bitcointalk, folks

[CoinCube]

In that case don't shit up this thread with your posts.  You cite yourself as a primary source -- only on bitcointalk, folks

No if you were not too lazy to even open the links I mentioned you would see that they are simply summaries of mostly existing works with citations. I am certainly not the primary source for most of the information.

Since you seem to value non summarized original links here you go. The source material for the posts in question. But you and I both know you won't ever read any of it you are just talking up a load of BS to cover your laziness.

References:
McLeay M, Radia A, Thomas R. Money creation in the modern economy. Bank of England Monetary Analysis Directorate Quarterly Bulletin 2014 Q1
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf
Rothbard MN. The Foundations of Modern Austrian Economics, Edwin Dolan, ed. (Kansas City: Sheed Andrews and McMeel, 1976), pp. 160-184
http://mises.org/rothbard/money.pdf
Murray N. Rothbard, Economic Depressions: Their Cause and Cure
https://mises.org/daily/3127
Ludwig von Mises Institute, Austrian Business Cycle Theory
http://wiki.mises.org/wiki/Austrian_Business_Cycle_Theory#cite_note-6
Christina D. Romer, Business Cycles
http://www.econlib.org/library/Enc/BusinessCycles.html
Shelby Moore III, Understand Everything Fundamentally
http://www.coolpage.com/commentary/economic/shelby/Understand%20Everything%20Fundamentally.html
Matt Taibbi The Great American Bubble Machine, Rolling Stones July 9, 2009
http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405
Ludwig von Mises. Human Action: A Treatise on Economics 1949
http://mises.org/Books/humanaction.pdf