I’ve read through the literature you sent me on fractional reserve banking on a few different occasions but I still fail to see the disanalogy between fractional reserve parking lots and fractional reserve banking. Both issue demand deposits to property, I don’t understand why it is fraudulent for the bank the moment they issue demand deposits but it is only fraudulent for the parking lot owner when available spots are available and he still refuses to let in a spot hunter. To be consistent wouldn’t the bank only be fraudulent when the banker refuses to redeem demand deposits when base money is still available for withdrawal? To be clear I agree with you fully that if a banknote is not marked as fractionally backed then it should be legally assumed to be fully backed, I’m talking only about banknotes that are clearly marked as fractionally reserved.
Here’s the difference. In fractional reserve banking, A lends $100 to B, the bank. B gives A a demand deposit for that $100. B keeps a reserve of 10%. B lends out $90 to C. B gives C a demand deposit for that $90. Thus, both A and C are the “proper” owners of that $90. This is incompatible with libertarian law, since only one person may own one thing at a particular time. In sharp contrast, in a “fractional reserve parking lot” it is not the case that two or more people each own 100% of the same thing. For in this latter case, there are, say, 100 parking spots and 150 people with tickets for these spots, no one has any right to a parking space. Rather, everyone has a right to look for a spot, and if there is one free, to take it. This is very different. You say: “. Both issue demand deposits to property.” This is not correct. Only the bank does this. The parking lot owner only issue the right to hunt for a parking spot.
7:21 pm on June 17, 2016