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Don't you know how the financial system works? Banks make currency. With Bitcoin, they haven't figured out how to do the same. Their empire is in danger. His ar
by transverse 9y ago
Don't you know how the financial system works? Banks make currency. With Bitcoin, they haven't figured out how to do the same. Their empire is in danger. His argument is predicated on the false assertion that currency has to be legally recognized; it doesn't. It only has to be accepted by those who trade with it. Not only is he bashing Bitcoin, but he is bashing all of cryptocurrency. What an idiot he is. The real fraud is perpetrated upon us by banks who lend dollars without holding hold an equal value of gold or silver. In past centuries, this was punishable as a felony by death.
- atomical 9y agoI would recommend you read one of Paul Krugman's book to understand how banking and the economy work.
- fredsir 9y agoCould you elaborate what specifically is wrong with what transverse is claiming?
- maxerickson 9y agoThe part about not backing deposits with silver and gold being fraud is pretty wrong. Even in Ye Olden Daze, banks would send deposits of things like gold and silver right back out the door as loans.
- sjbase 9y agoWell, the very first assertion "Banks make currency" is not accurate in the US (the context of the article). Currency is "made" by a combination of the US Treasury and policy set by the federal reserve. The fed is a bank of sorts, but in no sense is a bank like JPMC creating currency.
- transverse 9y agohttps://en.wikipedia.org/wiki/File:Fractional_reserve_lending_varyingrates_100base.jpg https://en.wikipedia.org/wiki/File:Fractional_reserve_lendin... shows how banks effectively expand currency. It's linked in https://en.wikipedia.org/wiki/Money_multiplier https://en.wikipedia.org/wiki/Money_multiplier
- deleted 9y ago[deleted]
- dgut 9y agoWhy the downvotes? transverse is right. The medium of exchange doesn't have to recognised by the Government, only accepted by both ends.
- brockwhittaker 9y agoBanks like JP Morgan don't have the power to put more money into circulation, so you're wrong.
- acty1 9y agoYou're incorrect because you are imprecise. Banks can AND do create M2, M3, etc. When they give you a loan, the money got created according to fractional reserve requirements. If you mean they cannot create currency, then you would be correct, but you said money and did not specify if you meant M0, M1, M2, etc. Actually the Federal Reserve, which is a private bank, has complete control over currency too. The currency and money supply of the USA has been outsourced to a private unelected entity.
- sp527 9y agoI'm not entirely sure if this is a joke or not. One of the fundamental functions of a bank is to increase the money supply by creating debt.
- lotsoflumens 9y agoYou should review the concept of "fractional reserve banking".