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Austrian economics and libertarians think fractional reserve banking is inherently fraudulent. Just more right-wing lunacy to easily ignore.

• ty6853 2y ago
  There is still a piece of truth to it. If I warehoused anything but dollars as a "fractional reserve", the first time the system fails (as the banking system has many times even under the federal reserve most notably in the great depression) I would be prosecuted for fraud/theft/ whatever they could come up with when I explained I had only lent out the inventory and I had hoped I would have enough around at any point in time to satisfy anyone withdrawing. People would be angry and the sentiment would be quite popular. Before the federal reserve existed and banks did fractional reserve on their own, after a failure it would be quite common for them to be accused of being crooks. Even if what they were doing was basically the same as what the federal reserve does but done privately. The banks ultimately colluded in a secret meeting under assumed identities with legislators (on Jackyll Island) to just to cartelize the system to hedge that risk, and the vote was rammed through before the public knew of the meeting or could react (and later written this was done on purpose because they knew it was democratically unpopular and would fail under transparency).