This article originally appeared in the Free Market, February 1990 (8.2), and is included in the book The Economics of Liberty, edited by Lew Rockwell. The banking dilemma seems eternal, like the monetary dilemma, the tax dilemma, and the marital dilemma. The essence of the banking dilemma, however, is that the depositors’ money is not in the vault awaiting the depositors’ decision to withdraw it. Instead it is out on loan or invested in the money market or in mortgage-backed securities. Some of the money is in the vault or on deposit with the Federal Reserve – these funds are … Continue reading Bring Back the Bank Run!