by Walter E. Block
Subject: bank notes
I agree with your follow-up to Response #7. (https://www.lewrockwell.com/2016/02/walter-e-block/qa-walter-block/) One must factor the intent of the bank when determining fraud. Given the potential dire consequences of FRB, a bank ought to warn a depositor of those consequences (losing everything in one’s account) every time he opens an account. And the warning ought to be in bold, large type with every statement.
Some years ago, I asked 10 people this question: “Who owns the hundred dollars a person deposits in a bank?” Two of the ten had worked in bank. One was a C.A. Several were engineers. One was a lawyer. All but the lawyer got the answer ‘wrong’. They thought the depositor was the owner.
If I were an absolute ruler, and powerless to yield my power in favor of libertarianism (I would be executed immediately by my Prætorian Guard), I would outlaw FRB and require that banks lend only the money of their shareholders. Depositors would be charged a market fee for keeping their money safe & secure. [Jim Grant points out that prior to 1935, if a bank looked shaky, the authorities would tap the shareholders directly for additional capital.]
It seems ludicrous to me that the general population is effectively forced into the lending business, about which most people know nothing. In the days of large price inflation, no one in his right mind (except perhaps the criminal element) would keep large sums in a safe deposit box. Nowadays, with super low interest rates, I’m surprised more people aren’t withdrawing their money. I expect that TPTB are anticipating a massive withdrawal, which is why they want to outlaw cash. Very discouraging.
Thanks for your support. Who DOES own that money? The bank, unfortunately. Who SHOULD own it? The depositor, of course.