Comment by weli
17 hours ago
It all comes back to fractional reserve banking. It is the root of all evil in our financial system. If Rothbard could only see the current state of affairs...
17 hours ago
It all comes back to fractional reserve banking. It is the root of all evil in our financial system. If Rothbard could only see the current state of affairs...
Rothbard would probably lament that we have not yet turned children into "financial products" as well.
https://mises.org/mises-daily/children-and-rights
This is a crank opinion that is somehow everywhere. The building is real, it's not fractional.
The bank lended more money than it has in reserves allowing for speculation and extra inflation of perceived value of an asset
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You do not even need fractional banking for this. Same thing could happen without it. Someone lends money and is unable to pay it back. Both sides pretend that things will eventually go well. As at least on paper they have not lost anything until prices are realised.
Without fractional banking the bank needs to be way more cautious when appraising an asset and be more conservative with the future gains estimation. Decreasing speculation and inflation of value.