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Just 3% is cash in the economy; Everything else is debt, debt and damn statistics; http://www.positivemoney.org/our-proposals/debt-based-money-vs-sovereign-mone
by known 9y ago
Just 3% is cash in the economy; Everything else is debt, debt and damn statistics;
http://www.positivemoney.org/our-proposals/debt-based-money-vs-sovereign-money-infographic/ http://www.positivemoney.org/our-proposals/debt-based-money-...
- JumpCrisscross 9y ago> for every pound in your bank account someone else must have a pound of debt This is called double-entry bookkeeping [1]. Every pound in your bank account is a debt on the bank's balance sheet. If it weren't, you wouldn't have any claim to exercise when you walked into the bank to demand your deposits. [1] https://en.wikipedia.org/wiki/Double-entry_bookkeeping_system https://en.wikipedia.org/wiki/Double-entry_bookkeeping_syste...
- andy_ppp 9y agoThat’s true except fractional reserve banking means the lending of those “debts” out by the bank multiple times. Doesn’t seem really like a liability in the normal sense.
- JumpCrisscross 9y ago> Doesn’t seem really like a liability in the normal sense Banks borrow from depositors and lend to borrowers. Deposits are a liability in that if the bank can't pay them back, the bank's assets are seized the firm put under conservatorship (or even liquidated, e.g. Lehman Brothers). Note that eliminating fractional-reserve banking, i.e. switching to a full-money system [1] per the Chicago Plan [2] is not a free lunch. It shifts a lot of power from de-centralised actors to the state. That, in turn, makes central-bank independence even more important [3]. (Note that implementing the Chicago Plan would maintain double-entry bookkeeping, and so the persistent Internet meme about us being in a debt-denominated economy.) [1] https://blogs.cfainstitute.org/investor/2016/01/27/is-this-the-end-of-fractional-reserve-banking/ https://blogs.cfainstitute.org/investor/2016/01/27/is-this-t... [2] http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf [3] https://people.ucsc.edu/~walshc/MyPapers/cbi_newpalgrave.pdf https://people.ucsc.edu/~walshc/MyPapers/cbi_newpalgrave.pdf
- soVeryTired 9y agoFractional reserve banking doesn't really exist anymore. There are reserve requirements in many countries, but they exist in order to prevent the banks from holding too many liquid assets, rather than putting a ceiling on the amount of loans it can make. But in Canada and the UK, the reserve requirement is zero.