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Why Fractional-Reserve Banking Would Be Limited in an Unhampered Market

- Frank Shostak -

I enjoyed reading and learning from this article. Fractional reserve banking will one day come undone, because if something can happen it eventually will. The central banks can try to "head it off at the pass" , but combined with their own practice of creating money out of thin air while juicing the stock market, they will flood the country with funny money, bringing about hyperinflation as in Weimar Germany. Got gold?

Commented 2262 days ago

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Beginning of the headline :The so-called multiplier arises as a result of the fact that banks are legally permitted to use money that is placed in demand deposits. Banks treat this type of money as if it was loaned to them, thus loaning it out while simultaneously allowing depositors to spend that money.RELATED: "Austrians, Fractional Reserves, and the Money Multiplier" by Robert BatemarcoFor example, if John places $100 in demand deposit at Bank One he doesn't relinquish his claim over the deposited $100. He has unlimite... Read More

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