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jox
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Iceland Ponders Radical Money Plan Including Elimination of Fractional Reserve Lending and Deposit Insurance - Mish - Global Economic Analysis

Excellent news!!

I support Positive Money initiative, so I'm 100% with the Iceland proposal.

Anyway, somebody could point defects on this proposal, or better forms of managing the creation and distribution of money. The important things are: 1- That everybody be aware that the current system is profoundly flawed. 2- That there are alternatives more efficient, modern and fair. And then, we can have a civilized, informed and democratic discussion about the reforms to implement.

Commented 3313 days ago

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Beginning of the headline :I have long railed against fractional reserve lending, duration mismatches (e.g. banks issuing 2-year CDs and lending money for 15-year mortgages), bank's ability to lend money into existence, and deposit insurance. Fractional reserve lending allows banks to lend out a near infinite amount of credit with essentially no backing. Money inevitable creates asset bubbles, but as long as the bubbles are expanding it appears the system is solvent. Money that depositors believe is available on dema... Read More

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