Fractional Reserve Banking and its Evil Actions

Fractional Reserve Banking and its Evil Actions

Fractional Reserve Banking and its Evil Actions Explore the intricate and controversial world of fractional reserve banking with "Fractional Reserve Banking and its Evil Actions." This comprehensive book delves deep into the mechanics, ethics, and economic impacts of fractional reserve banking, offering a thorough critique from an Austrian economics perspective. Starting with an insightful introduction, the book critiques the misrepresentations by Selgin and White of Mises's views and presents a detailed analysis of the Neo-Currency School (NCS) and Neo-Banking School (NBS). It emphasizes the fundamental role of ethics in banking and provides a clear explanation of what fractional reserve banking is. The book explores how fractional reserve banking is incompatible with the Austrian Business Cycle Theory, detailing the interactions between fiduciary media, the loan market, and interest rates. It examines the problematic nature of artificially stimulated economic activity and its impact on labor costs, the structure of production, and deflationary and inflationary pressures. With an in-depth analysis, the book explains how fiduciary media injections affect both the vertical and horizontal structures of production, providing a comprehensive look at the complexities involved. It also discusses the inherent instability and unsustainability of fractional reserve banking, presenting arguments on why it constitutes fraudulent contracts and should be viewed as embezzlement. Challenging widely held beliefs, the book critiques prominent economists like Hayek and offers a rebuttal to Eric Posner. It also explores game theory models, the tragedy of the commons, and the harmful effects of fractional reserve banking on society. Finally, the book presents viable alternatives to fractional reserve banking, arguing for full reserve banking as a profitable and sustainable option. With meticulous research and detailed references, "Fractional Reserve Banking and its Evil Actions" is an essential read for anyone interested in the ethical and economic dimensions of modern banking practices. This book is perfect for economists, students, policymakers, and anyone seeking a deeper understanding of the financial system and its impact on the global economy.