Talk:Criticism of fractional-reserve banking

Cites for Conventional Economic Analysis

I'm back. I was condemned to solitary confinement for a week due to my "shouting" during etiquitte class. I was confined to a dirty third class cabin of S.S. Titanic and it was not a pleasant experience I can assure you. Rats everywhere. I even saw some of the biggest rats actually leaving the ship whilst I was locked up in that filthy hole (they were carrying Euros and Swiss francs and gold bars and muttering something in Pidgin English about "gold leasing from the Fed" and "scam" and "suckers". What the Hell was that all about? They also pointed and exclaimed "that way to Mont Perilous"... or "Mount Philistine"... or something like that. God knows what they were on about but they wanted to get the Hell off the boat quick-smart, that's for sure).

Anyway, the reason for my comment is that I've been observing the slow descent of this article into anodyne rubbish (it's been like watching evolution in reverse), and I've been AMAZED no one has had the time (or the guts?) to provide citations for the conventional economic analysis section. It's sitting there as naked as an innocent little girl in a Seymore Butts film. If it's so "conventional" where the Hell are all the cites? Where is a disciple of "pretty boy" Keynes when you need one? Where are the rational expectations dudes with their Lucas equations? Where are the neo-classicalists? Come on, stand up for yourselves! Don't take this lying down. Austrian Economics has been marginalized and ridiculed for decades. Now is the time to show us what you're made of. There are so many of you in tenured academia and yet NOT ONE OF YOU has had the guts to comment or provide references on the conventional stuff. Shame on you. Where's your courage? You guys are yella.--Karmaisking (talk) 09:11, 10 January 2008 (UTC)

Cites provided.--Gregalton (talk) 15:59, 11 January 2008 (UTC)

• "virtually all banking systems worldwide operate on some form of fractional reserve banking, and full-reserve banking is often considered 'hypothetical.'"

The above statement is false and should be balanced. Most countries on modern currency boards have held full commodity reserves for their currencies .. a notable example would be Hong Kong. BigK HeX (talk) 06:13, 12 February 2008 (UTC)

You are confusing the banking system with the currency regime. The Hong Kong Monetary Authority does hold full reserves for all of their notes issued; commercial banks operating in Hong Kong do not hold full reserves against all of their deposits.--Gregalton (talk) 12:27, 12 February 2008 (UTC)

Gregalton gets active (again)

Dearest Gregalton, given the "heated" discussions above regarding your compulsive deletes and edits on this page, how about you discuss further deletions here rather than continue the slaugher unilaterally? Also, how about REFERENCING you own work of "genius" - the "Conventional Economic Analysis" section - first, BEFORE you attempt to scale Mont Perelin? Do NOT delete without discussion here, given your proven track record of recidivistic deletion activity.--Karmaisking (talk) 22:57, 10 January 2008 (UTC)

Actually, in this case the discussions above clearly support extensive deletions. Please do not reinsert w/o discussion here. And please try to be civil.--Gregalton (talk) 23:05, 10 January 2008 (UTC)

Lede alterations

I replaced a reference with a fact tag because it did not make the claim the article reported. I replaced "paper currency" with "representative money". Fiat current and representative currency are the "two kinds" of money, whereas "paper currency" can be either government-backed or convertible to specie. 06:11, 12 February 2008 (UTC)

Friedman et al claims

I'd be grateful for a source regarding Friedman's criticisms of fractional reserve banking.--Gregalton (talk) 17:38, 12 February 2008 (UTC)

He was very critical of Federal Reserve policy but was not as up-front as Murray Rothbard on the "parasitic" evils of fractional reserve banking. However, he was clearly supportive of the "controversial" information contained in the "Money Masters" videos, which was extremely critical of unhinged frb. His support of the Monetary Reform Act is mentioned here. No doubt others can find more "reputable" sources for his criticism of the Federal Reserve (which he clearly accused of causing the Great Depression).--Karmaisking (talk) 03:34, 13 February 2008 (UTC)

This does not seem to constitute criticism of the concept of fractional reserve banking. I've taken a look at his monetary history of the US, and can find no clearly critical statement on this. I'm removing until something can be found.--Gregalton (talk) 09:53, 13 February 2008 (UTC)

Milton Friedman was more a critic of intervention from the Federal Reserve than a critic of fractional reserve banking. Friedman would probably agree more with "free" banking than full-reserve banking. Although, he showed support for monetary reform, there is no evidence (that I could fine) that he agreed with the proposal of full reserve banking. --EGeek (talk) 07:10, 14 February 2008 (UTC)

I'm new to wikipedia but would just like to point out that Friedman did support full-reserve banking:

"As a student of Henry Simons and Lloyd Mints, I am naturally inclined to take the fractional reserve character of our commercial banking system as the focal point in a discussion of banking reform. I shall follow them also in recommending that the present system be replaced by one in which 100% reserves are required."

Milton, F., A program for monetary stability, New York, Fordham University Press, 1960, pp. 65

I'm surprised to see opponents of fractional reserve banking as cranks and non-mainstream, seen as there is a long history of opposition to it(See the social credit movement) and many mainstream economists (such as Milton Friedman) oppose it. Jamalloyman (talk) 19:28, 26 March 2008 (UTC)

Did he meant 100% reserves for central or for commercial banks? --Doopdoop (talk) 21:58, 27 March 2008 (UTC)

In optimum quantity of money page 83, he seems to be taking a more nuanced view (emphasizing how much he disagrees with Simons). As far as I can tell from brief research, he seems to be saying full reserve only on demand deposits. As some have discussed, this version of full-reserve banking doesn't change much: it's easily subverted/avoided by money market accounts and the like. Remember, there are different types of money, and (save cash and reserves) all the other components (M1 through 57 or whatever we're up to now) are money substitutes. The distinction is (even in Friedman's words) somewhat arbitrary.--Gregalton (talk) 15:25, 28 March 2008 (UTC)

Thanks for the link Gregalton. Much appreciated. However I think his opposition to Simons is based more on how the reform would be implemented rather than on the reform itself. Friedman still writes that "I agree with Simons on the desirability of 100% reserve banking" (page 83). I think that when Friedman writes about this reform he is referring to M3 (ie: demand deposites etc. like you said) but I don't think it would be easily subverted if there was a law stating 100% reserves were required... Also, thankyou to however moved my original quotation from the auto-archiver, my apologies. Jamalloyman (talk) 15:56, 28 March 2008 (UTC)

Auto-archiving

I've established an auto-archiver here. Much-needed.--Gregalton (talk) 09:25, 26 February 2008 (UTC)

Why so many deletions?

sorry, I tried to read this article but somehow it is now edited so that there is no information as to what the real (or even any) criticism is of fractional-reserve banking. Instead, there are a lot of confusing statements that point to somebody's idea that there is no such criticism. Please restore the original history with accurate citations, or just remove the whole article if you can't agree. —Preceding unsigned comment added by 70.127.124.69 (talk) 23:07, 14 March 2008 (UTC)

You (obviously) haven't read the archived talk pages. The decision on deletion of this article was negative (the decision was "To Keep"). However, several editors decided that much of the "explanatory" material was unnecessary or original research, and so that explanatory material was deleted. You can still access it via the history pages if you wish; however there was a consensus decision to delete around 90% of the earlier versions of this article and no one has made a material contribution since some of the principal editors left/were barred.--Lagrandebanquesucre (talk) 06:58, 15 March 2008 (UTC)

The original article "Debt-based Monetary System" was written mostly by a single editor who only used a few reliable sources - most were blogs or gold bug sites. This particular editor was permanently banned from Wikipedia due to continued violations even after several warnings and temporary bans. Since this article only explains one type of criticism of fractional reserve banking, either a merge into the fractional reserve banking article or a merge of the criticism section from the fractional reserve banking article to this article should be considered.--EGeek (talk) 16:01, 16 March 2008 (UTC)

"Money as Debt" as an External Link

It's an interesting question whether "Money as Debt" should remain as an External Link, even though it has been deleted as a stand alone entry in WP itself (apparently on notability grounds). Does anyone know whether there are any WP guidelines on whether something can stay in as an External Link, even though it has been deleted as an entry on WP itself? Even though it may not be notable "enough" to live as a stand alone entry on WP, an External Link may still provide useful explanatory background to the article itself - provided it is not spam, or defamatory etc. No one has suggested that "Money as Debt" is inaccurate or defamatory or spam. It has been accepted as fact-based and informative, but has been rejected on the grounds that it is "fringe" and therefore not sufficiently "notable". I assume there is greater latitude given to allow a "trivial but informative" External Link? Is this correct? This is an interesting (albeit somewhat archane) question which an expert on WP guidelines could perhaps explain. In the meantime I've reinstated the External Link to "Money as Debt" but obviously not added it back as a "See Also" internal link.--Lagrandebanquesucre (talk) 08:40, 16 March 2008 (UTC)

See external links. I see no reason to include this. It's not notable, it's factuality has in fact been questioned. The site also seems to be advertising for the DVD of the movie, not a review or commentary on it. As such, I'm deleting the link.--Gregalton (talk) 08:52, 16 March 2008 (UTC)

Fact-based? I'm sorry, no. I stopped watching this "documentary" after it stated that banks could make a $10,000 loan from only $1,111.12 of deposits (creating $100,000 from the multiplier effect) due to a 10% reserve ratio (9:1 ratio in the movie). Based on what I read from synopsis and reviews, the rest of the movie might as well discuss UFOs. There is a reason beyond a simple coverup conspiracy why this movie is not discussed through reputable and reliable channels; thus, leading to its non-notability and exclusion from Wikipedia. Also note that this article was deleted on grounds of notability, not "fringe". Based on policy, Fringe articles are not excluded from Wikipedia unless they are not notable.--EGeek (talk) 15:37, 16 March 2008 (UTC)

It's slightly disturbing when "critics" and "editors" keep deleting all references to Money as Debt without having fully reviewed the material. I didn't see one reference to UFOs in the entire video. Perhaps if you watched it through to the end you may form a different, more balanced view? One slight, very technical error does not destroy the usefulness of the video to inform and teach, nor does it prove that the video is peddling conspiracy theory paranoia (I assume that is the intended implication in your use of the "UFO" smear?). I will respectfully leave out any reference to "Money as Debt" in deference to your views, but please try to be more respectful and less dismissive of this material, allowing others to make their own judgment. That scoundrel and rogue, Karmaisking, has been removed (fairly in my view) for his/her outrageously disrespectful conduct towards other honest, humble and good-hearted contributors, such as Gregalton and Zenwhat, who were just trying to improve the article and ensure the truth was accurately reflected in this article. Let's not repeat the error and let's try to remind ourselves of Gregalton's wise admonition to "try to be civil" at all times.--Lagrandebanquesucre (talk) 03:07, 9 April 2008 (UTC)

If we're going to be civil, let's not put "question quotes" when referring to others without some reason. I personally think EGeek is a "scholar and a gentleperson." ))

His main point is that the movie is not notable, and has some content that appears to be of questionable accuracy that would certainly make it non-encyclopedic. In other words, it's getting deleted from links because it's irrelevant to a serious article. And please refrain from linking to it further (like twice in para above) in talk pages unless there is some compelling reason - makes people like me who spend too much time removing conspiracy theory/promotional nonsense from WP unhappy.--Gregalton (talk) 12:15, 9 April 2008 (UTC)

I fully support your firm stance against that loser/reject/troll/sockpuppet/mockpuppet/conspirator, the uncouth "Barbarian" Karmaisking, Gregalton.

However, I must make the following very humble corrections to your post. First, I have no issue with EGeek being described as a "scholar and gentleman/gentleperson/gentle[insert pc expression here]." Why did you feel the need to make this redundant comment?

More importantly, some would find your unfounded (implicit) assertion that "Money as Debt" is "conspiracy theory/promotional nonsense" an unkind, ungenerous... nay, uncivil... smear on the video. You ask others to be civil. Please lead by example. Characterizing this video as "conspiracy theory/promotional nonsense" prejudices the ability of others to reach their own conclusions. I encourage others to view the video and form their own opinion, uncolored by anyone else's tainted characterizations - either "Barbarian" Karmaisking's biased, zealot-like support, or Gregalton's "civil" disdain.--Lagrandebanquesucre (talk) 06:21, 10 April 2008 (UTC)

I "question quoted" my comment on EGeek both as a compliment to him and to show that its use is unnecessary and (since ironic) not polite. In short, a joke, and not a very good one.

Fine, I have my opinion on this video, and it is not an implicit one but explicit. That does not prevent anyone from forming their own opinion, but may serve as a red flag that "this is not considered factual, reliable, or notable."

But we stray from the point of the talk page, which is about the article. Basta.--Gregalton (talk) 06:35, 10 April 2008 (UTC)

Oh, now I see "the joke." Very amusing.

There's no need to "red flag" an external link to protect people from themselves. I am confident that the public has the intelligence to understand the underlying issues coming out of the Money as Debt video. I agree that "Barbarian" Karmaisking's support of the gold standard is ridiculous primitive 19th century rubbish that should be condemned forever and forever to the "dustbin of history" (just like communism). Long reign fiat currencies all around the world I say. They've lasted well so far. Long may they flourish.

Oh, I felt it a sign of civil politeness to link "Money as Debt" to the actual video rather than the "conspiracy theory/promotional nonsense" website, so others can easily judge for themselves the subject we are discussing. That should end the matter. Basta indeed.--Lagrandebanquesucre (talk) 11:38, 10 April 2008 (UTC)