From: S
Sent: Saturday, February 20, 2016 3:56 PM
To: Walter Block
Subject: Against Fiduciary Media

Walter:

I read your, Hans’ and Guido’s excellent 1998 paper entitled “Against Fiduciary Media”.  I appreciate that the issuance of fiduciary media constitutes a fraud, in that two people cannot both own the same property at the same time.  However, my question to you, which I don’t think is addressed in this paper, is this: Who could legitimately bring an action for fraud?  If the depositor knows that the bank will lend out his demand deposit and that the bank is keeping less than 100% reserves against this deposit, if the borrower from the bank also knows that the bank is doing this, if people to whom the depositor writes a check know that the bank is doing this, and if investors in the bank know that the bank is doing this, who can legitimately complain about or sue for fraud?

S

Dear S:

Thanks for mentioning this article of mine:

Hoppe, Hans-Hermann, with Guido Hulsmann and Walter E. Block. 1998. “Against Fiduciary Media,” Quarterly Journal of Austrian Economics, Vol. 1, No. 1, pp. 19-50, (http://www.mises.org/journals/qjae/pdf/qjae1_1_2.pdf);(http://www.qjae.org/journals/qjae/pdf/Q11_2.pdf); translated into Spanish and published as “Contra los medios fiduciaros,” Libertas, No. 30, May 1999, pp. 23-73; 2011 translation and reprint in Romanian Economic and Business Review

In my view, all those victimized for fraud can be sued for it. That is, all of those you mention. Who would be the plaintiffs? Everyone else. Who can properly sue the embezzler? All his victims. Fractional reserve banking is, in my view, akin to embezzlement.

Best regards,

Walter

The Best of Walter E. Block