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This is kind of like saying we can eliminate most automobile fatalities by eliminating cars and making everyone walk or take the train everywhere. Yes, it woul

This is kind of like saying we can eliminate most automobile fatalities by eliminating cars and making everyone walk or take the train everywhere. Yes, it would solve one type of problem. But nobody wants your solution because it’s an unreasonable trade off for everyone to solve an extremely rare edge case. Single-minded optimization for single edge cases is really easy in fantasy worlds, but in the real world people choose trade offs even if they come with rare edge case risks. > Daily reminder that bank runs wouldn't be a thing if we did duration matching, forbidding banks from borrowing short and lending long. In other words, no liquid deposits allowed. Banks charge customers to hold their liquid cash because they can’t do anything reasonable with it. So yes, you could make one type of extremely rare problem go away by removing a desirable feature used by hundreds of millions every day. I don’t think people would actually choose this, though. > As always, the underlying problem in banking is that the banks are lying, telling two or more people they own the same dollar at the same point in time Either you don’t understand how banking works, or you’re trying to project a crude misunderstanding onto the general public. The concepts of assets and liabilities are well understood in the business world. Banks aren’t “lying” and fractional reserve banking does not mean that banks are creating fake dollars. Liabilities have always been part of the equation.

nordsieck 4y ago
> Yes, it would solve one type of problem. But nobody wants your solution because it’s an unreasonable trade off for everyone to solve an extremely rare edge case. Can you explain why this is bad? People lived with hard-ish money systems for extremely long periods of time. > The concepts of assets and liabilities are well understood in the business world. Banks aren’t “lying” and fractional reserve banking does not mean that banks are creating fake dollars. Liabilities have always been part of the equation. I mean, it's really about how you define words. Most people believe that they have money in the bank. When in reality, they have unsecured debt to the bank. Although to be fair, for most people that debt is backstopped by FDIC/NCUA. But, of course, that unsecured debt is often referred to as money, so I can't really blame them too much.
- twblalock 4y ago
  > Can you explain why this is bad? People lived with hard-ish money systems for extremely long periods of time. The problems those systems caused are the reason we created the Fed and soft money. Hard money ruined many lives, caused many panics, and is an intellectually bankrupt idea that only cranks are still devoted to.
  - gberger 4y ago
    Do you mind explaining why? I'm not familiar with hard vs soft money.
    - theptip 4y ago
      It’s a pretty involved topic. “ The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes” gives a good narrative that exemplifies some of the problems.
- karpierz 4y ago
  > Can you explain why this is bad? People lived with hard-ish money systems for extremely long periods of time. Fractional reserve banking has been the dominant form of banking for the last 300 years, and has roots well beyond that.
- wpietri 4y ago
  > People lived with hard-ish money systems for extremely long periods of time. True, but most of human history was also pretty awful. If subsistence agriculture is your idea of a good time, nobody's going to stop you. But it's definitely not what most people want.
  - nordsieck 4y ago
    > True, but most of human history was also pretty awful. If subsistence agriculture is your idea of a good time, nobody's going to stop you. But it's definitely not what most people want. I can't tell - are you arguing that soft money is a necessary precondition to industrialization?
actionablefiber 4y ago
What an odd choice of analogy. Incidents where someone driving a car hurts or kills someone else is in fact an extremely common "edge" case. It happens, like, several hundred thousand times more frequently than bank runs do.
FactKnower69 4y ago
>extremely rare edge case hilarious attempt at a metaphor, traffic deaths from personal automobiles have been in the top 10 causes of death worldwide for the better part of a century lol

nordsieck 4y ago

> Yes, it would solve one type of problem. But nobody wants your solution because it’s an unreasonable trade off for everyone to solve an extremely rare edge case. Can you explain why this is bad? People lived with hard-ish money systems for extremely long periods of time. > The concepts of assets and liabilities are well understood in the business world. Banks aren’t “lying” and fractional reserve banking does not mean that banks are creating fake dollars. Liabilities have always been part of the equation. I mean, it's really about how you define words. Most people believe that they have money in the bank. When in reality, they have unsecured debt to the bank. Although to be fair, for most people that debt is backstopped by FDIC/NCUA. But, of course, that unsecured debt is often referred to as money, so I can't really blame them too much.

twblalock 4y ago
> Can you explain why this is bad? People lived with hard-ish money systems for extremely long periods of time. The problems those systems caused are the reason we created the Fed and soft money. Hard money ruined many lives, caused many panics, and is an intellectually bankrupt idea that only cranks are still devoted to.
- gberger 4y ago
  Do you mind explaining why? I'm not familiar with hard vs soft money.
  - theptip 4y ago
    It’s a pretty involved topic. “ The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes” gives a good narrative that exemplifies some of the problems.
karpierz 4y ago
> Can you explain why this is bad? People lived with hard-ish money systems for extremely long periods of time. Fractional reserve banking has been the dominant form of banking for the last 300 years, and has roots well beyond that.
wpietri 4y ago
> People lived with hard-ish money systems for extremely long periods of time. True, but most of human history was also pretty awful. If subsistence agriculture is your idea of a good time, nobody's going to stop you. But it's definitely not what most people want.
- nordsieck 4y ago
  > True, but most of human history was also pretty awful. If subsistence agriculture is your idea of a good time, nobody's going to stop you. But it's definitely not what most people want. I can't tell - are you arguing that soft money is a necessary precondition to industrialization?

actionablefiber 4y ago

What an odd choice of analogy. Incidents where someone driving a car hurts or kills someone else is in fact an extremely common "edge" case. It happens, like, several hundred thousand times more frequently than bank runs do.

FactKnower69 4y ago

>extremely rare edge case hilarious attempt at a metaphor, traffic deaths from personal automobiles have been in the top 10 causes of death worldwide for the better part of a century lol