Is fractional reserve fraud?

Is the free exchange of banking services between consenting adults fraud?

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114 Responses to “Is fractional reserve fraud?”

  1. Jason Soon Says:

    Not if you believe in sharia law like Birdy

  2. Lyam Says:

    Ok, I confess ignorance.

    What is fractional reserve?

  3. anti-bird Says:

    look it up lyam, that’s what google’s for.

  4. anti-bird Says:

    here:

    http://en.wikipedia.org/wiki/Fractional-reserve_banking

    In addition Bird doesn’t want banks to mismtach their books. Basically he wants banks to act like safety deposits.

  5. anti-bird Says:

    He also supports sharia banking and would cut off your limb if you contravened his laws. Birdie has AQ roots me thinks.

  6. graemebird Says:

    Cambria doesn’t understand a damn thing. He’ll only confuse you. He’s a liar and a degenerate.

  7. Lyam Says:

    Thanks for the link 🙂

  8. graemebird Says:

    Another stupid comment by Lyam.

  9. TerjeP (say tay-a) Says:

    What is fractional reserve?

    Fractional reserve banking is banking with a bigger name.

  10. Tillman Says:

    Graeme

    As an advocate for the end of FRB, are you pleased that banks have effectively ceased lending? Isn’t that really the same outcome you would get if FRB were outlawed?

  11. Lyam Says:

    TerjeP

    “Fractional reserve banking is banking with a bigger name.”

    That’s what had concluded :-), thanks.

  12. Steve Edney Says:

    This is the shorted thread on fraction reserve ever.

  13. Steve Edney Says:

    Or shortest.

  14. Steve Edney Says:

    I would hate Birdy to think that I have shorted anything – another crime in his books.

  15. Graeme Bird Says:

    Well that’s because I now realise I was mistaken.

    Steve, I owe you and Humphreys a big apology. It took me a long time to realise that you were right and I was wrong but I now accept that so let’s move on.

    Sorry!

  16. graemebird Says:

    “Graeme

    As an advocate for the end of FRB, are you pleased that banks have effectively ceased lending? Isn’t that really the same outcome you would get if FRB were outlawed?”

    Yes and no. Its good that banks are no longer putting people in further debt. But banks would loan under 100% backing. They would loan only what they were able to secure rightful and unambiguous possession of.

    Lending something you are not in lawful possession of is fraud.

  17. JohnZ Says:

    Wrong, turkey.

    If everyone understands and consents to the financial agreement, then it is not fraud.

  18. graemebird Says:

    You can only consent to a contract where your property is concerned. Fractional reserve contracts are not enforceable and involve selling or lending property that you don’t have lawful possession of.

    Thats fraud.

  19. Lyam Says:

    “You can only consent to a contract where your property is concerned. ”

    Nonsense.

    If adult A1 has a contract to borrow 1Mil from adult A2 at 10%,
    – A1 has an obligation to pay his fees
    – A2 has an obligation to find 1Mil dollars, (for example by borrowing from bank B at 4% because he has a good credit.)

    As a matter of fact, that is exactly what happens between financial institutions.

  20. graemebird Says:

    Well you aren’t talking about fractional reserve then are you!!!!!!

    Fractional reserve is where you loan out silver that you don’t have and that does not exist. Or alternatively you loan out silver you are not in rightful possession of.

  21. Lyam Says:

    I was disputing your claim that:

    “You can only consent to a contract where your property is concerned. ”

    with an example.

    Their would be no banking without fractional reserve. Bankers make a living lending part of the money deposited in there coffers at a higher interest rate than the one they pay to the depositors.

    There is no banking without fractional reserve.

  22. graemebird Says:

    Yes there can be banking without fractional reserve. And if it doesn’t make a profit then we can do without it.

    Find out how banking works with 100% backing. This is no place for elementary lessons on this matter. Why are you pretending to know how 100% backing works? When clearly you do not.

  23. graemebird Says:

    My blog has straightforward explanations of the difference between proper banking and bank-cash-pyramiding rorts. Go there if you want to learn.

  24. Lyam Says:

    “My blog has straightforward explanations of the difference between proper banking and bank-cash-pyramiding rorts. Go there if you want to learn.”

    Your blog is fun because you’re completely nuts and believe you have superior knowledge in all sorts of domains, but it’s the last place on the net for straightforward explanations.

    I usually go to wikipedia for a first step. Go here

    http://en.wikipedia.org/wiki/Full-reserve_banking

    and learn how to write a structured document.

  25. Mark Hill Says:

    Graeme,

    You are an absolute loon. You think that creation of M1 matters more than creation of new higher powered money.

    Banks create money in the context of financial transactions that represent wealth creation, division of resources and entrepreneurial skill in organising resources.

    I’ve embarrassed at length on catallaxy as to why fractional reserve isn’t inflationary without excessive high powered money growth, and that Rothbard’s theory about oscillation’s creating the business cycle is ridiculous and that Mises’ explanation of the business cycle is much better and fits in with recent empirical studies. I’ve also shown you that a free market in banking would minimise inflation or deflation as well through competitive issue and a loan book constraint on the present values of loans and new issues.

    Please note you’ve wrapped yourself up in Mises and I’ve shown your silly ideas to be in direct contradiction to Mises’ magnus opum, Human Action.

    Graeme’s solution to inflation is to shut down banking and print money. How did that work in the Roman Empire and middle ages you muppet?

  26. jc Says:

    Sorry Birdie. You’ve lost the fractional reserve argument too.

  27. Mark Hill Says:

    “I’ve embarrassed at length”

    LOL!

    I’ve embarrassed you, Birdie…

  28. graemebird Says:

    No I”ve won every argument here. Its fraud to lend out something that you don’t have lawful possession of, or to lend out something that doesn’t exist. Even a primitive bootnigger ought to understand that and if this is not fraud then the phrase itself is meaningless.

  29. graemebird Says:

    Lyam you proved that you didn’t understand 100% backing. You don’t understand it. Its better that you actually understand what you are talking about rather then just be continually getting things wrong or making nonsense up.

  30. jc Says:

    where’s the legal fraud, bird? WTF is it.

  31. graemebird Says:

    You dummy. We are talking about what the law SHOULD be. Fucking hell you stupid bootnigger. You’ve lost the context.

  32. Mark Hill Says:

    Right. So it is not fraud at all. Just in your imagination, and for what purpose? It’s been clearly demonstrated that banking fractionality and free banking are positive for societies.

  33. jc Says:

    Thanks for getting in first , Mark.

    So it’s not a fraud but you would like to make it law under Birdie’s hybrid Sharia banking system.

    Thanks.

    So why are you calling it a fraud then?

  34. Mark Hill Says:

    Bird’s definition of fraud unravels more every time he talks about it. We’ll be down to the corpse soon if any more bandages come flying off.

  35. jc Says:

    He’s lost this one too, mark.

    He’s incorrectly suggesting fractional is a fraud when in fact by his own admission is isn’t a fraud.

    Birdie, you have lost every single argument at this site.

  36. graemebird Says:

    No its quite clear that ponzi-schemes are fraud. Always have been.

  37. Mark Hill Says:

    What Ponzi scheme you idiot?

    A Ponzi scheme is fraud, by definition. You think you can make things fraudulent if you don’t understand them.

    Please fuck off and get an education.

  38. Mark Hill Says:

    “Fractional reserve contracts are not enforceable and involve selling or lending property that you don’t have lawful possession of.

    Thats fraud.”

    ???

    So if I sublet a property I lease, that is fraudulent – or fractional reserve isn’t – and ought not to be considered fraud – but you also reckon it is fraud.

    What the bloody hell…?

    You are very confused Graeme. Please seek remedial, then high school and university level education to clarify your ideas.

  39. graemebird Says:

    No but you bring up a good example for once Mark. If you are allowed to sublet a leased property you can sublet it but you have lawful possession of that leased property for a definite time period.

    So if you have lawful possession of a bunch of gold for a certain time period clearly you are within your rights to lend it out for a lesser time period.

    But since you are dealing with hundreds of small loans you are within your rights to amalgamate all the deposits you have ON TIME DEPOSIT and lend them out. With a bias to lending less long, and so long as you plan your cash flow well.

    What is fraud is when you and other banks get together and allow bank-cash-pyramding. So its really a crime involving several banks and it might well be with plausible-deniability as is the case with company-share-pyramiding in conjunction with naked short-selling.

  40. graemebird Says:

    Clearly from the way you treated your example you still have no idea about new money creation. After all this time you still aren’t across the subject.

    This is depressing. It is not just Humphreys that refuses point blank to learn anything.

  41. graemebird Says:

    You idiots still cannot maintain the context. Fractional reserve is inherently fraudulent. But currently it enjoys legal protection and relentless subsidy. So under current arrangements of course it is legal. It ought not be because it is inherently fraudulent.

    Got that yet you fuckwits. Imagine being so dense that you are totally unable to maintain the context. We are dealing with some pretty dim bulbs here.

  42. graemebird Says:

    Its not legal for any of us by the way. Only for people who enjoy special legal protection. Any one of us would be taken to prison for acting like a bank does.

  43. jc Says:

    Biurdie:

    You yourself said that fractional is not fraudulent, so stop being so malo-dramatic you big drama queen.

    It is not fraudulent. You lost this debate and live with the consequences.

  44. Lyam Says:

    “…Fractional reserve is inherently fraudulent. But currently it enjoys legal protection…”

    Australia is a land of laws not of men or morals. You may find fractional reserve morally objectionable, but it is perfectly lawful, and in economic and legal terms it is not a fraud regardless whether YOU or anybody finds it morally fraudulent or not.

    “…and relentless subsidy”
    Some financial institutions were, and will in the future, be kept out of bankruptcy by government action to keep the functionality available while preferably whipping out stockholders and management. That is independent of their legal minimum reserve level.

    As Mark, John and others have already told you: get yourself an education in genera, and in the art of rhetoric in particular, if you want to have influence in the national political debate.

  45. Lyam Says:

    genera == general 🙂

  46. jc Says:

    You are such a drama queen pussy, birdie. Man up and stop being so pussified.

  47. Jason Soon Says:

    Look Graeme

    Just apologise, promise to learn and we’ll put this little episode behind us.

  48. Graeme Bird Says:

    Fractional reserve is inherently fraudulent. Obviously I recognise that its a legalized, priviledged and subsidised practice in this country.

    You’ve made an idiot of yourself AGAIN Cambria. And when one of you morons makes and idiot of themselves the others appear to pile on.

    This ones a real pile-up. I never claimed that fractional reserve was illegal in this country you stupid fucking moronic bootnigger.

    When did I claim that. You’ve just been beaten in an argument so you have decided to put words in my mouth.

  49. Graeme Bird Says:

    What was the question you idiots.

    “IS THE PRACTICE OF FRACTIONAL RESERVE ILLEGAL FOR BANK LICENSE HOLDERS IN AUSTRALIA?”

    Well of course the answer is no.

    What a fucking bunch of morons you people are. Do you not get tired of being so fucking stupid.

  50. Graeme Bird Says:

    Surely you must realise that if you are going to allow yourselves the luxury of being casually moronic all the time like this then your ideas can scarcely have any merit ever!!!!

  51. jc Says:

    Birdie says:

    No I”ve won every argument here. Its fraud to lend out something that you don’t have lawful possession of, or to lend out something that doesn’t exist. Even a primitive bootnigger ought to understand that and if this is not fraud then the phrase itself is meaningless.

    And then says:
    When did I claim that. You’ve just been beaten in an argument so you have decided to put words in my mouth.

    then he projects his own dishonestly and inadequacy on others by saying this:

    Surely you must realise that if you are going to allow yourselves the luxury of being casually moronic all the time like this then your ideas can scarcely have any merit ever!!!!

    You lied Birdie. You have been caught out and now you are either going to freaking well apologize or you’re going down like a heap of rubble.

    Apologize for you lie bird. Right no! Go!!!!

  52. graemebird Says:

    No JC. You’ve been caught out being a moron again.

    Clearly we all know that this inherently fraudulent practice is legal in this country, not for you or for me, but under license. And its such a racket its bolstered by endless subsidy and regulatory cover.

    You’ve made an idiot of yourself and the fact of these stupid tribal fuckheads piling on makes your side of the argument more and not less embarrassing.

    Look at the case when I argued before an international forum swamped by PHD’s. It was the one time it didn’t turn into a thread of doom because no-one was stupid enough to claim I wasn’t telling the truth. Any one of them who had tried it on would have immediately embarrassed himself before his peers.

  53. Lyam Says:

    Hi Birdy 🙂

    I have just cut off your balls regarding your latest opus on continental drift.

    https://graemebirdforum.wordpress.com/2009/02/23/open-forum-23-02-2009/#comment-652

  54. jc Says:

    So it is a fraud but is isn’t a fraud. Good one Birdie. Another fine mess you’ve got yourself into.

  55. John Humphreys Says:

    It’s not a fraud on any definition of the word. This issue has gone to the courts and they have found that the banks provide honest information on the nature of the contract with the depositors.

    So if you’re against FRB, then you’re actually against contracts.

    Not very libertarian.

  56. graemebird Says:

    No thats not right. Fractional Reserve Banking is inherently fraudulent since its valid to make contracts with ones own property and not with the property of others.

    The matter didn’t go to the courts and get found valid. It was a practice found valid by the house of Lords. Hardly a neutral body. And they were in error.

    Today we have people selling and trading non-existent gold and silver and lending shares they do not own to people who sell them and crash the stock price.

    All these practices are fraudulent inherently and they have nothing to do with freedom of contract or libertarianism.

    You’ve just got to attempt not to be an idiot Humphreys.

    If you sell or lend something its inherently fraudulent for that thing to not be real. That is to say if you are supposed to be lending someone a kilo of gold and you don’t have a kilo of gold THATS FRAUD. If you lend them nothing but air and not even the air thats not freedom of contract THATS FRAUD. And no matter how stupid and uncomprehending you are you cannot make this a practice that is not inherently fraudulent.

  57. Lyam Says:

    Birdy,

    If you really want to know why the world’s financial market went into a meltdown last fall go here

    http://baselinescenario.com/

    You will see that there is plenty of blame to find, but that fractional banking wasn’t the cause.

    .

  58. graemebird Says:

    I already know how they went into a meltdown. All banking crises without exception are to do with fractional reserve. And the greater the ratio between the money supply and the amount of cash, the greater is the inherent instability of the system.

    It should be noted that Humphreys takes an OCCULT view of bank-cash-pyramiding. He believes by some OCCULT process that bank-cash-pyramiding creates real resources. He has said this outright. Jason Soon believes this also. But he tends to keep it quiet like the inscrutable chinaman that he is.

  59. graemebird Says:

    I’ve been scrolling back on the ALS blog to find proof positive of OCCULTISM in Humphreys attitude towards bank-ponzi-money. Anyhow its just shocking how obsessive he is about this incredibly crude idea of the carbon tax. Its a constant drumbeat for the carbon tax. Again and again and again this fellow is promoting the carbon tax.

    And to this day he has no clue about the damage it will do even though its been explained to him clearly and many time. This is an economics ignoramus.

  60. graemebird Says:

    Here it is:

    http://blog.libertarian.org.au/2008/11/17/fractional-reserve-banking/

    He ought to be burnt at the stake for occultism and macromancy.

    “FR-banking is simply allowing voluntary contracts between people. To abolish FR-banking would be a draconian act of government, banning a consentual act between adults, which would drastically reduce loanable funds (and therefore capital accumulation) by outlawing intertemporal matching between debt types.”

    Get it. Nominal increases in loanable funds, without matching savings, increases real investment resources in the Humphreys OCCULT view.

    The fellow is an economics crank.

    Bank Cash Pyramiding is equivalent to releasing new cash. There is very little difference in its effects. Obviously the release of new cash doesn’t create new investment resources. But Humphreys OCCULT position on fractional reserve tells him that bank-cash-pyramiding somehow increases real investment resources in some mysterious way.

    So we see that Humphreys is as much of a monetary crank as any Keynesian.

  61. graemebird Says:

    For fucksakes. You dummy. You linked to Geithner. He’s one of the assclowns who caused the problem. He wouldn’t know shit from shinola and now he’s pushing the snake oil of stimulus packages and bank bailouts.

  62. Lyam Says:

    “I already know how they went into a meltdown. All banking crises without exception are to do with fractional reserve.”

    No 🙂

    It has to do, amongst others, with the loss of value of assets. In the case of the last crisis, the brutal decline in US housing prices which propagated itself across financial markets via toxic securities and credit default swaps.

    The origin was reckless mortgage policies made possible by the phenomenal increase in the the “Big Pile Of Money” since 2000.

    In other words, it’s the abuse of opaque derivatives combined with reckless mortgage policies which are at the core of the problem.

    Now go to

    http://baselinescenario.com/

    and learn.

  63. Mark Hill Says:

    Graeme, a self described follower of Ayn Rand says:

    A is A

    A is not A

    A is A when I want to it be A

    therefore A is A.

    Rand actually backed free banking but thought without a free market gold standard (but freely set reserves) people probably would discount notes themselves.

    The only economic argument Graeme brings up is this mysterious oscillations crap. From this, Hayekian triangles and roundabout production must also be bad. As well as unstable money demand and changing tastes.

    Therefore we must ban changing preferences as a form of fraud.

  64. Graeme Bird Says:

    No no Lyam. The fact is that all banking crises are to do with fractional reserve. This has been the case without exception for 1000 years. Don’t gainsay me when you don’t have a clue what you are talking about.

    Mark you have no idea what Rand thought about fraud-banking. So don’t bullshit me on that score. Mises was talking prior to the information age when he thought that liberty would get rid of bank cash pyramiding or make it less of a problem. But its to be understood that he thought it was always a bad thing. Given the occult feelings that people have towards the practice we could never be free of it because local governments, state governments or a Federal government would be likely to sponsor it and there goes the theoretical idea that it could die out.

    It is not possible for you economic cranks and sellouts to estimate the relative merits of fraud banking versus property rights in banking, if you are harbouring Occult and irrational beliefs to do with money creation magically creating new investment resources.

    All of you have shown this occult belief one time or another. Even if seldom as out there as the Humphreys howler.

  65. Mark Hill Says:

    “Mark you have no idea what Rand thought about fraud-banking. So don’t bullshit me on that score.”

    http://www.aynrand.org/site/PageServer?pagename=education_campus_speakers_abst_crisis_sals

    The Case for Free Banking and the Gold Standard
    by Richard M. Salsman

    “Financial meltdowns in Southeast Asia, Japan, Russia and Latin America continue a long historical pattern of failure in government-managed monetary systems from which the United States is not immune.

    Today most economists blame “crony capitalism” and insufficient bank regulation for such meltdowns. They insist that the purpose of central banks and international agencies, such as the International Monetary Fund (IMF), are to “stabilize” economies and ensure safe and sound financial systems. They allege that the bureaucrats “fight inflation,” “lower interest rates,” “smooth business cycles” and spur growth.

    Mr. Salsman demonstrates that the precise opposite is the case. Central banking is a system of state coercive monopoly over money, established and perpetuated to finance unlimited governments — those which spend beyond tax revenues to support welfare-state programs. Central banking brings not stability but inflation, high and volatile interest rates, boom-and-bust cycles, financial panics and crashes, poverty, and the destruction of sound money and private, otherwise stable, banking. Agencies such as the IMF accomplish the same evils — the spread of welfare and stagnation — but on an international scale. Mr. Salsman argues that only a system of full, laissez-faire banking based on the gold standard can deliver on the promises central banking repeatedly breaks. Such systems operated quite successfully in many countries, including the United States, in the nineteenth century. Far from returning to an archaic and anarchic system of money and banking, he argues that if we are to raise our living standard we must move forward quickly to a modern and vibrant financial system, one entirely free of crony socialism, completely devoid of government subsidies and regulations.”

    Graeme now comes in with yet another gem:

    “No no Lyam. The fact is that all banking crises are to do with fractional reserve. This has been the case without exception for 1000 years. Don’t gainsay me when you don’t have a clue what you are talking about.”

    Maybe you should email Peikoff and Salsman and tell them that they are idiots and morons, etc.

    “Mises was talking prior to the information age when he thought that liberty would get rid of bank cash pyramiding or make it less of a problem.”

    No he didn’t, he didn’t care as long as there was a market supplied quantity of base money, hence gold or free banking. Please stop saying what Mises said when in Human Action, in the Indirect exchnage section, he clearly supports free banking and “disses” the currency school.

    Please stop lying and misrepresenting Mises and Rand.

    “It is not possible for you economic cranks and sellouts to estimate the relative merits of fraud banking versus property rights in banking, if you are harbouring Occult and irrational beliefs to do with money creation magically creating new investment resources.”

    What was that you idiot? You said it wasn’t fraud, but you would like it to be, based on a crank theory of business cycles, an abberation of the ABCT and based on monetary theory which includes greenslips as money.

    A is A Graeme, now and forever, not when you want it to be. Our banjing system and previous free banking systems were never and will never be fraudulent until some idiot Kim Ill Jung clone like yourself impoverishes us all.

  66. Graeme Bird Says:

    Well whats wrong with all that. She’s like me is against central banking.

    This is just you being a fucking moron again and being quite unable to comprehend what it is you are reading. You ought not be hiding behind people and putting words in their mouth anyhow. If you cannot make the case straight, and you never have, well then you cannot make the case.

  67. Mark Hill Says:

    “completely devoid of government subsidies and regulations”

    Reconcile this statement of Salmsman with your Shar’ia banking system you dropkick.

  68. Graeme Bird Says:

    EVERY BANKING CRISIS IS ABOUT FRACTIONAL RESERVE AND OBVIOUSLY SO. Just get used to it you fucking moron.

    No pyramid scheme can last forever. Not even a subsidised and regulated one like modern banking. So this system has periodic crises which we call recessions.

  69. Graeme Bird Says:

    Salsman is not fucking relevant you stupid cunt.

    If you cannot justify your bullshit without hiding behind people you cannot justify it.

    You are an idiot Mark. You are always dragging in third parties. Because you don’t fucking understand economics. Otherwise you wouldn’t press-gang people into your argument.

  70. Graeme Bird Says:

    And you are a lying cunt too. Because I don’t support Sharia law.

    So you just lie, your a monetary occultist, you don’t understand money creation, and you can never argue the case straight but instead drag other people into the argumnent, throwing words in their mouth all the way.

    LEARN THE MATERIAL YOU STUPID CUNT.

    That way you can argue the case straight.

  71. Graeme Bird Says:

    “Mr. Salsman demonstrates that the precise opposite is the case. Central banking is a system of state coercive monopoly over money, established and perpetuated to finance unlimited governments — those which spend beyond tax revenues to support welfare-state programs. Central banking brings not stability but inflation, high and volatile interest rates, boom-and-bust cycles, financial panics and crashes, poverty, and the destruction of sound money and private, otherwise stable, banking. Agencies such as the IMF accomplish the same evils — the spread of welfare and stagnation — but on an international scale. Mr. Salsman argues that only a system of full, laissez-faire banking based on the gold standard can deliver on the promises central banking repeatedly breaks. Such systems operated quite successfully in many countries, including the United States, in the nineteenth century. Far from returning to an archaic and anarchic system of money and banking, he argues that if we are to raise our living standard we must move forward quickly to a modern and vibrant financial system, one entirely free of crony socialism, completely devoid of government subsidies and regulations.”

    I agree with every last word of that you stupid cunt.

  72. Mark Hill Says:

    “EVERY BANKING CRISIS IS ABOUT FRACTIONAL RESERVE AND OBVIOUSLY SO.”

    Obviously? Where is the irrefuteable, plain to see and well known proof?

    “Salsman is not fucking relevant you stupid cunt.”

    Oh really?

    An ARI writer, economist and fund manager disagrees with you. These guys treat Rand like the “word of the LORD”. I am pretty bloody sure they are right about Ayn Rand and you are wrong.

    I would love to see Peikoff rip shreds off you, you dummy.

    “You are an idiot Mark. You are always dragging in third parties. ”

    No Graeme, that is another lie you have made up. I am quite capable of demolishing your arguments, as seen on that painful catallaxy thread, but you keep on proclaiming to be the son and heir of Mises and Rand. It is up to me to inform the public of your proposterous pretending to the throne.

  73. Mark Hill Says:

    “completely devoid of government subsidies and regulations”

    Reconcile this statement of Salmsman with your Shar’ia banking system you dropkick.

  74. Mark Hill Says:

    I am starting to feel sorry for you Graeme.

    Do you suffer from Aspergers Syndrome or Paraphilia?

    If so, I will stop gently abusing you. If not, you need a good kick upside the chin.

  75. Graeme Bird Says:

    You are a fuckwit mate. You quote someone who agrees with me.

  76. Mark Hill Says:

    I blame your parents.

    They should have disciplined you much more severely.

  77. Mark Hill Says:

    ” Graeme Bird Says:

    March 2, 2009 at 12:08 am
    You are a fuckwit mate. You quote someone who agrees with me.”

    ” Mark Hill Says:

    March 2, 2009 at 12:06 am
    “completely devoid of government subsidies and regulations”

    Reconcile this statement of Salmsman with your Shar’ia banking system you dropkick.”

    My dear Graeme,

    It will not take me long to find the Ayn Rand quote completely contradicting you. You will learn that you can never polish a turd.

  78. Graeme Bird Says:

    Argue your case STRAIGHT you fuckwit. What is your monetary theory justification for fraud banking?????

    You never give it.

    What is your property rights justification for fraud banking?

    You never explain it.

    Why ought some people have these priviledges and others be denied?

    You have never reconciled it.

  79. Graeme Bird Says:

    If you want to make a case for this violation of property rights and CLARITY IN property titles well go ahead and make this case on your own. Don’t be press-ganging third parties into it.

  80. Jason Soon Says:

    justify your prohibition on banking turkey

    fractional reserve banking IS banking

  81. Graeme Bird Says:

    You have just no idea Mark. Because you expressed enourmous surprise and consternation when I showed how new money was created. So it came as a surprise to you. And still there remains no evidence that you believed what I was telling you or that you understand the process to this day.

    LEARN THE FUCKING MATERIAL BEFORE YOU MAKE A JUDGEMENT YOU FUCKING MORON.

  82. Mark Hill Says:

    Graeme you dropkick,

    Your presumptive notion that one can objectively define money is partly the reason why monetary policy does not work, vis a vis international capital flows.

    You didn’t teach me about the bank multiplier you idiot. I came to the conclusion it is conceited to assume to know the entire scope of what is used as money in the economy. Try to get your tiny little brain to understand this.

    “What is your property rights justification for fraud banking?”

    I don’t need one. You’ve admitted it isn’t fraud, just in your hypothetical dicatorship. Andrew Reynolds has shown you why it is legally cool.

    “LEARN THE FUCKING MATERIAL BEFORE YOU MAKE A JUDGEMENT YOU FUCKING MORON.”

    If only you’d do the same on just about any discipline of knowledge.

  83. Mark Hill Says:

    I will find the Ayn radn quote soon. Nevertheless, a good discussion about free banking:

    http://forums.4aynrandfans.com/index.php?showtopic=1798

    “This is Richard M. Salsman’s reply to the question posed by Gweg.

    QUOTE(Richard M. Salsman)
    In the history of free banking systems and gold-convertible currency, reserve ratios were roughly 30%. Today, under fiat-paper money schemes reserves for most banks are usually less than 5%. I disagree with your premise that keeping 100% reserves was not (or could not be) practical, for it is simply “warehouse banking” and it persists today in the safe-deposit-box departments of banks. Under such warehousing arrangements the bank doesn’t know (or care) what’s in your box and it doesn’t lend its contents; as a result, the bank earns no interest income and thus can’t pay you interest on your “deposit.” As a result, under warehousing you must pay the bank a monthly fee for storage, insurance and security expenses. Fractional reserve banking largely displaced warehousing because banks, facing borrowing requests, realized they could offer depositors the prospect of no longer paying warehouse expenses; instead, the bank would pay interest on deposits; and to do so, the bank had to receive interest income from borrowers of gold. Hence a system of fractional reserves – a mutually beneficial arrangement (and not “inherently fraudulent,” despite what some Austrian critics claim). Currency and checking deposits were then partly backed by gold and partly by loan assets. The banks still promised convertibility into gold on demand. Based on the law of large numbers (the fact that not all depositors would simultaneously demand all of their gold at once) they issued currency and checking deposits in a safe and secure manner, profiting by the “interest-rate spread” (say, interest of 5% received on loans, minus interest of 3% paid on deposits).

    The key to fostering trust and reputation under this system was not so much the size of the fraction of gold reserves held but the repeated and unquestioned ability and willingness of a bank to redeem its currency and deposits in gold whenever demanded by its depositors – and to hold sound loans. But a bank with high reserves and higher-quality loans which nevertheless occasionally suspended convertibility was a badly-run (and fraudulent) bank, while a low-fraction bank with lower-quality loans which nonetheless always met its obligations (by maintaining gold convertibility) was a well-run, well-trusted and profitable bank.

    What to say about the costs of transporting gold? What is there to say, but that such costs exist and the history of free banking and the gold standard showed why they were willingly incurred. There is a “cost of doing business” for every business; this one is unique to laissez-faire banking. It’s a canard to claim (as some do) that a non-gold monetary system somehow “economizes” on gold or reduces costs; only governments have run such systems and they are the most arbitrary, destructive and costly schemes ever devised. Quite apart from the turmoil they engender by inflation, deflation and high-and-gyrating interest rates, consider the thousands of people employed as foreign exchange traders; every minute of the day they buy and sell more than fifty different government currencies. Under the gold standard thus unproductive activity didn’t exist, because we had fixed exchange rates. By the way, notice that even though today we no longer have gold-based monetary systems, that’s because such systems have been made illegal (by legal tender laws and government gold nationalizations) and not because they were “more costly” than fiat-paper schemes. And today, although no government is any longer on a gold standard, people still mine, transport, store and insure gold.

    You ask what might happen in the future if it became easier (or more difficult) to mine gold; you further wonder if the relative value and purchasing power of gold might therefore change greatly. Gold is the only commodity in the world (and the only one in history) that is produced and accumulated; all other commodities are produced and consumed. Thus all the gold that’s ever been mined from the earth still exists; the above-ground stock always grows – and slowly. By now annual gold output is a mere 1-2% of the above-ground gold stock; the more gold accumulates, the less any one year’s output of gold (whether vast or severely limited) can change this slow and steady growth rate. Even amid large gold finds – in California (1848-1850) and a half-century later (in Canada and South Africa) – in no year was the above-ground stock of gold boosted by more than 10%. Thus the purchasing power of gold itself is not likely to swing up or down to any great degree in the future.

    Even if this were to happen, you ask if it would “threaten” a free banking, gold standard system and/or require a difficult switch in standard. History is replete with switched standards – and they entailed progress, not threats. Consider money, which was once cattle, but then shells, then wampum, or tobacco leaf – until rational men converged on gold as the supreme monetary standard. Or consider music media in the past decades: from recording music on rotating metal cylinders, to recording it on wax (at 78 RPM), then 45 RPM records, then long-playing (“LP”) albums (at 33 RPM), then 8-track tapes, cassettes and CDs. Businessmen figured it out; they were financially-motivated; and customers benefited by the improvements and changed standards, despite temporary inconveniences. In money and banking businessmen also have figured out how to change and improve standards (when left free): first from non-gold to gold-based systems, then, as gold-based systems were criminalized, they upgraded from currency to checking deposits to certificates of deposit to electronic debits and credits to ATM cards, debit cards, etc.

    The great tragedy of fiat-paper schemes is that they entail no standard whatsoever. People should focus on terminating this abomination and fighting for the freedom of laissez-faire bankers (and their customers) to again converge on an objective standard. Instead, many free-marketers focus on petty details and harbor perpetual doubts about how the system might work in the future.

    Richard M. Salsman, CFA
    President & Chief Market Strategist
    InterMarket Forecasting, Inc.
    1777 Fordham Boulevard – Suite 202-4
    Chapel Hill, North Carolina 27514

    EMAIL: RMSalsman@intermarketforecasting.com
    WEB: intermarketforecasting.com

    IFI is an investment research and forecasting firm that quantifies market-price indicators to guide the asset allocation decisions and trading strategies of pension plans, asset managers, financial institutions and hedge funds.”

  84. Mark Hill Says:

    Black Knight, how you keep on standing up is actually inspiring and sad at the same time:

    http://mises.org/story/1790

    “Ayn Rand was reportedly proud when a former member of her “inner circle,” Alan Greenspan, was appointed as President Ford’s chairman of the Council of Economic Advisors. And his role as Fed chairman is ironic given that as an acolyte of Rand’s in 1967, he had written: “[G]old and economic freedom are inseparable . . . [U]nder the gold standard, a free banking system stands as the director of an economy’s stability, central banks cause positive harm.” (274–75) Since then, according to Larry Sechrest, Fed Chairman Greenspan has faithfully pursued the Fed’s obligations as a central bank—to act as a “lender of last resort” and as the monopoly issuer of legal currency—both of which “actually increase the instability of the banking system.” (286) If Rand were living today, would she still be proud of her association with Greenspan?”

    I will find the Rand quote and shut you up for all time.

    Z, call me Beowulf.

  85. Mark Hill Says:

    A great site where Graeme can begin his education in economics:

    http://iang.org/free_banking/

  86. jc Says:

    Our banking system and previous free banking systems were never and will never be fraudulent until some idiot Kim Ill Jung clone like yourself impoverishes us all.

    Kim Ill Birdie. LOL.

    Birdie, I’m not kidding, but your economic/financial system would make north korea a boom town. People would emigrate there just to be away from Kim Ill Birdie economics.

  87. Graeme Bird Says:

    ” [U]nder the gold standard, a free banking system stands as the director of an economy’s stability, central banks cause positive harm.” ”

    YOU ARE A FUCKING MORON MARK. I don’t disagree with a single word of the above. The phrase “free banking” does not mean what you say it means. Its just a tag that people who take an OCCULT view of banking have tried to monopolise for themselves. I am a supporter of free banking. Free banking does not include the fraud of fractional reserve.

    You are such a fucking idiot Mark.

  88. Graeme Bird Says:

    Cambria you don’t know fucking anything about economics so its meaningless what you say.

    You have claimed that you cannot cut spending in a recession. And idiot that you are you roped in President Harding in support. You have claimed outright that banks do not create money out of thin air.

    Fuck off cambria. Don’t start typing when you have no idea what you are talking about you stupid bootnigger cunt, and refuse to learn.

    Its just rude for you people to pronounce on stuff that you have absolutely no idea about. Imagine being so fucking stupid as to deny that banks create the money out of thin air??????

    Beat it you stupid cunt.

  89. Graeme Bird Says:

    Imagine that. Cambria doesn’t understand how money is created, refuses to learn, and then presumes to make pronouncements on monetary policy like the stupid traitor cunt bootnigger that he is.

  90. Graeme Bird Says:

    This is what happens with monetary-economics. Its actually a very simple subject. But as soon as it comes up every economics-occultist, monetary crank, and stray bootniggers start weighing in in their utter ignorance and start confusing people.

    On Brian Caplans blog no-one dared to gainsay me because they would have looked like ignorant morons in front of their peers. So it was the one time that itinerant idiocy didn’t turn the discussion into a thread of doom.

  91. Graeme Bird Says:

    Lyam this is what you have to watch out for. Out of all these guys only Humphreys even understands the basic mechanics of money creation. As hard to believe as that is I have been quite unable to convince the others to learn anything about the subject in three years. In Australian economics the last thing they teach people is actual economics.

    And yet Humphreys who at least appears to have a crude understanding of matters takes an OCCULT view of the results of fractional reserve pyramiding. The only reason he can do that is he is totally ignorant about the capital markets. He is blind to business-to-business spending.

    So what you see is all the irrational set, though they may disagree amongst themselves, are in fact against reason and clear property rights when it comes to money.

    Most of them pose as fans of fraud banking. But its a lie. In fact they are fans of fiat currency. As their utter lack of enthusiasm for monetary reform betrays. Thats another thing about Australian economists. They are entirely evasive and dishonest.

  92. Graeme Bird Says:

    “I need someone’s help.

    It is impossible to get a direct quote from Ayn Rand on free banking and the gold standard.

    I remember roughly how her quote goes…that we should have a free market in money…money should be backed by gold….but free issue should prevail. Reserve ratios don’t matter as long as the banking system is fully disclosed…

    If I find the two quotes I can shut Graeme Bird up once and for all.”

    There you are you idiot. Cannot make your own case but need to rope Ayn Rand in. You didn’t have shit. And Ayn Rand isn’t primarily a monetary economics expert in any case whereas I am.

    THERE IS NO SUBSTITUTE FOR LEARNING THE MATERIAL YOURSELF YOU IDIOT.

    You cannot have a valid opinion unless you understand the material. And you’d hardly be roping in Ayn Rand for support if you understood the material.

    Learn the material and you won’t have to go through these humiliating displays of stupidity and reliance on others.

  93. Graeme Bird Says:

    Surely it must be a mystery to you Lyam why these ignorant fools cannot make their case on grounds of monetary-economics….. But need to rely on out of context libertarian apple-pie statements or alternatively the press-ganging in of dead people to try and support their occult and ignorant positions.

    Australian economics graduates really are a bit of an embarrassment.

  94. Jason Soon Says:

    http://allocasuarina.blogspot.com/2007/07/is-this-man-graeme-bird.html

  95. graemebird Says:

    Marvellous argument. But really you ought to have learnt monetary economics and capital theory. At least Humphreys seems to have gotten one half of that equation. That beats you by one half.

  96. Mark Hill Says:

    “And Ayn Rand isn’t primarily a monetary economics expert in any case whereas I am.”

    Really? The economics non-graduate from New Zealand is gainfully employed doing what?

  97. GMB Says:

    I’m a graduate idiot. I had an economics degree about the time you were born if not before.

  98. Tailgunner Joe Says:

    I’m a graduate idiot

    Truer words were never spoken. You have a PhD in idiocy. You distinguished yourself in it.

  99. Graeme Bird Says:

    Graeme

    No offense, but NZ doesn’t have proper universities. A degree from a university in NZ is equivalent to getting about halfway through high school anywhere else in the English speaking world.

    So your economics degree puts you roughly on par with someone who has taken year 9 Commerce at Baulkham Hills High.

  100. Graeme Bird Says:

    Look I know talking to myself is a little weird. But you have to see it all in context.

  101. Graeme Bird Says:

    By the way, I would like to announce that I am living a gay lifestyle.

    I wouldn’t say that I am a homosexual per se, but I have slept with a few blokes who are definitely a bit queer.

  102. GMB Says:

    Someone is posting under my name. It’s not me.

    PS I am gay though.

  103. Mark Hill Says:

    “GMB Says:
    March 2, 2009 at 12:50 pm

    I’m a graduate idiot.”

    Maxima cum laude?

  104. Winchester Quartermain Says:

    Mr Bird

    I am extremely distressed to hear these rumours of your sickness. Please clarify which of these characters is you and whether there is any truth to the claim that you harbour such perversions.

  105. graemebird Says:

    Yes Winchesters its true. I’m a gay homosexual queer sodomite shirtlifter pillow biter.

    I’m a gay man. I’m very, very gay.

    I go under the name of Buck Naked on gay sites.

  106. The Real Graeme M. Bird Says:

    Look it’s not gay unless your balls touch. So I would definitely describe myself as 60-80% heterosexual.

  107. graemebird Says:

    They are all liars Winchester. I am happily married. This is what always happens when these leftists lose the argument. They all turn to queers and make with these perverted displays of sodom over the internet. It would be easy to find out who was right and who was wrong even if you’d just caught the morning bus from Mars by the antics of these loony-toons.

  108. graemebird Says:

    I’m the one with the Chairman Mao gravitas. Thats a hangover from trying to get more stuff through moderation at Larvatus Prodeo. We figured that I’d get more gear past the itinerant leftist moderators with Chairman Mao as my picture. It actually worked like a charm for awhile. Which I think says a lot form lefty psychology.

  109. graemebird Says:

    This is what always happens Winchester. When I first got onto Catallaxy two leftists, Fyodor and Nabakov, started subjecting me to all this sodomite “sexual” harassment. The must have a sixth sense about them in that they knew I was authentically pro-liberty. Whereas one notices with these leftists that they did not pick on all the faux-libertarians about the place. This is why I’ve had to take a pretty had line on deviants. Its because the first thing these guys will do is subject you to this line of harrassment. And so you have to hit back with anti-deviant rhetoric. Whereas if you come back at these queers in a half-hearted way they will try and wrong-foot you with the political correctness jive.

    I really suspect that its Fyodor and others trying this on. Once they lose the argument they try and undermine your status one way or another.

  110. The Real Graeme M. Bird Says:

    The must have a sixth sense about them in that they knew I was

    I have since learned that this is known as “gaydar”.

  111. Fyodor Says:

    I’m the one with the Chairman Mao gravitas.

    Gravitas? Wrong again – definitely over-reaching this time. I reckon you must have a doctorate in foolosophy, Turkey.

    P.S. I’m not impersonating you, Birdy. I do think you’re in the closet about your true sexuality, however, as you’re unhealthily fixated on homosexuality. Also: I’ve never lost an argument to you. I don’t think anyone has. You’re like the zero kelvin of intellectual debate.

  112. The Real Graeme M. Bird Says:

    And let me say that being “authentically pro-liberty” is fabulous.

    Of course, when I say “liberty” I mean “ass-fucking”.

    I will be wearing my bike shorts on an authentically pro-liberty float in the mardi gras, girlfriend!

  113. graemebird Says:

    Down in Oxford St, I’m known as ‘The Darlinghurst Bike’

  114. Ian Thorpe Says:

    To whom it may concern

    I have known Graeme Montgomery Bird for many years. We have spent a lot of time together.

    And I would like to say that there is nothing even remotely fruity about him. Graeme is very firm and vigorous and one of the most masculine men I know.

    Graeme and I have many times gone on the prowl for pussy, and so I can so with absolute confidence that Graeme loves the poontang. Give Graeme a whiff of the bearded clam and he’s off like a rocket.

    He does not like cock. Not at all.

    Yours truly
    Ian Thorpe
    Winner of Many Gold Medals and Not Gay

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