Mon 2010-09-20 10:14 EDT

Mish's Global Economic Trend Analysis: Fictional Reserve Lending And The Myth Of Excess Reserves

...1) Lending comes first and what little reserves there are (if any) come later. 2) There really are no excess reserves. 3) Not only are there no excess reserves, there are essentially no reserves to speak of at all. Indeed, bank reserves are completely "fictional". 4) Banks are capital constrained not reserve constrained. 5) Banks aren't lending because there are few credit worthy borrowers worth the risk. ...concern that excess reserves will lead to lending and inflation is totally unfounded in theory and practice. Fractional Reserve Lending is really Fictional Reserve Lending. In practice, the major constraints to lending are insufficient capital and willingness of credit worthy borrowers to seek loans.

excess reserves; Fictional Reserve Lending; Mish's Global Economic Trend Analysis; myth.

Mon 2010-08-23 11:03 EDT

A Program for Monetary Reform, the 1939 Document | Economic Stability

Paul H. Douglas, Irving Fisher, et. al

[pdf download] ...Our own monetary policy should likewise be directed toward avoiding inflation as well as deflation, and in attaining and maintaining as nearly as possible full production and employment. ...[100% Reserve System] Since the fractional reserve system hampers effective control by the Monetary Authority over the volume of our circulating medium it is desirable that any bank or other agency holding deposits subject to check (demand deposits) be required to keep on hand a dollar of reserve for every dollar of such deposit, so that, in effect, deposits subject to check actually represent money held by the bank in trust for the depositor.

1939 document; Economic stability; Monetary Reform; program.

Social Democracy for the 21st Century: A Post Keynesian Perspective Thu 2010-07-22 16:00 EDT

Fractional Reserve Banking: An Evil?

Lord Keynes

Hostility to fractional reserve banking is ubiquitous. The Austrians hate it and regard it as a type of fraud. There are even a good many people on the left who despise fractional reserve banking as an evil institution. However, a careful look at fractional reserve banking suggests that it is not necessarily a problem with modern fiat money, a well-regulated financial system, deposit insurance and a central bank ready as the lender of last resort. Fractional reserve banking without these safeguards can be extremely destabilizing and has often led to disastrous bank collapses and depressions...

21st century; evil; fractional reserve banking; Post Keynesian Perspective; social democracy.

Jesse's Café Américain Mon 2010-04-19 15:22 EDT

Jim Rickards: Possible Run on the Gold Bank, Fed Insolvent, Currency Endgames in US Debt Crisis

Jesse

...There is obviously not enough gold and silver to cover the physical demand if holders of paper certificates in unallocated accounts demand delivery, and most likely only a small fraction could be covered with the practical supply available. Cash settlement will be enforced in the majority of cases...

Currency Endgames; debt crisis; Fed Insolvent; Gold Bank; Jesse's Café Américain; Jim Rickards; possible running.

The Full Feed from HuffingtonPost.com Thu 2010-01-07 19:46 EST

D+7: Shock and Awe

Dennis Santiago, CEO, Institutional Risk Analytics

..the burning question, of course, is "will moving your money have an effect?" And by effect, I don't mean making a momentary political statement. I mean making a structural difference to the country's financial system. The answer is yes, and here's how..if the public shifts a small fraction of the nation's core deposit base into these institutions it magnifies the stabilizing effect on this portion of the financial system. That's provided the receiving bank is already in good shape, of course, and isn't saddled with other problems. That's why the listing tool we created for the MoveYourMoney campaign only shows the best of breed, to our best ability to identify who they might be. I

7; awed; com; D; full Feeds; HuffingtonPost; shocks.

Mish's Global Economic Trend Analysis Mon 2009-12-21 19:32 EST

Fictional Reserve Lending And The Myth Of Excess Reserves

Michael Shedlock

...The chart shows an unprecedented amount of excess reserves, almost $1.2 trillion. According to Money Multiplier Theory (MMT) and Fractional Reserve Lending, this amount may be lent out as much as 10 times over and when it does, massive inflation will result. The above hypotheses regarding "Excess Reserves" are wrong for five reasons. 1) Lending comes first and what little reserves there are (if any) come later. 2) There really are no excess reserves. 3) Not only are there no excess reserves, there are essentially no reserves to speak of at all. Indeed, bank reserves are completely "fictional". 4) Banks are capital constrained not reserve constrained. 5) Banks aren't lending because there are few credit worthy borrowers worth the risk.

excess reserves; Fictional Reserve Lending; Mish's Global Economic Trend Analysis; myth.

Fri 2009-05-08 00:00 EDT

Rebuttal To Mish: FRL - The Market Ticker

fractional reserve lending defended against claim of fraudulence; ``So long as the bank never lends out more unsecured than it has in excess capital, there has been no fraud. The instant the bank does so, it has committed fraud.'' ``Our failure is regulatory. It is against the law to commit fraud and yet we have refused to prosecute those who have claimed to be solvent when they are not. ''

FRL; Market Ticker; Mish; Rebuttal.

Thu 2009-05-07 00:00 EDT

Mish's Global Economic Trend Analysis: Case Against the Fed and Fractional Reserve Lending

``Fractional Reserve Lending (FRL)...in conjunction with micro-mismanagement of interest rates by the Fed is the root cause of the financial crisis''; ``FRL is the enabler for credit bubbles. Given enough time, credit bubbles are guaranteed to implode in deflationary fashion.'' austrian economic libertarian critique

Case; Fed; fractional reserves lending; Mish's Global Economic Trend Analysis.

Tue 2009-04-21 00:00 EDT

Reserve Banking - The Market Ticker

defending fractional reserve banking

Market Ticker; Reserve banks.

Tue 2009-04-21 00:00 EDT

Followup: Reserve Banking - The Market Ticker

defending fractional reserve lending; ``leverage limits prevent excessive expansion of credit without interfering with the intermediation function''; propose to set regulatory capital limits as the inverse of leverage; transparency of asset valuations

followup; Market Ticker; Reserve banks.

Wed 2009-02-11 00:00 EST

Mish's Global Economic Trend Analysis: Open Letter To Congress On Sharing The Pain

``I call for the resignation of Fed Chairman Ben Bernanke, the abolishment of fractional reserve lending, and the end of the Fed itself''

Congress; Mish's Global Economic Trend Analysis; Open Letter; pain; shares.

Fri 2009-01-16 00:00 EST

The Wall Street Ponzi Scheme called Fractional Reserve Banking

The Wall Street Ponzi Scheme called Fractional Reserve Banking, by Ellen Brown

Wall Street Ponzi Scheme Called Fractional Reserve Banking.

Fri 2009-01-16 00:00 EST

Jesse's Café Américain: Is the Comex Doing Fractional Reserve Delivery of Gold?

Jesse's Café Américain: Is the Comex Doing Fractional Reserve Delivery of Gold?

COMEX; Fractional Reserve Delivery; gold; Jesse's Café Américain.

Fri 2008-12-05 00:00 EST

Mish's Global Economic Trend Analysis: China Prepares for Worst Case As US Prepares For More Central Planning

``the cure is to embrace deflation and stop fractional reserve lending and the serially bubble blowing activities of the Fed''

Central Planning; China prepares; Mish's Global Economic Trend Analysis; prepared; worst case.