Punish The Big Banks…Reward The Small Banks

Dr. Gary North had an excellent article on banking in the Weekend Edition of http://www.LewRockwell.com. He proposed that citizens withdraw their money from any bank that accepted bail-out money from the Government. Then he recommended that we establish our banking relationships with small community banks.

Here is a powerful video about this new movement.

But, I’m going to go one better on Dr. North’s article. I want to remind you all that Fractional Reserve Banking (FRB) happens in ALL banks in the USA. That means that ALL BANKS can create money out of thin air as they make loans. The present reserve rate in banking is around 10-15%. That means that when you make a deposit, the bank only has to keep a very small reserve in cash, and the rest can be loaned out just like they own it. Then they can create more money through more loans, all backed by a paper currency without any value.

Any state that seceded from the USA will have to address FRB and gold-backed money before they do anything else. The states that prohibit FRB and fiat currency will be the ONLY ONES that have a chance of survival. All others will eventually fail.

6 Responses to Punish The Big Banks…Reward The Small Banks

  1. “Prohibit” fractional reserve banking? It is obvious that FRB is fraud, but it would take a large, intrusive and overbearing state to constantly keep tabs on all banks to make sure they do not take part in such. To “prohibit” FRB is a pipe dream, unless you cede the existence of an intrusive government. What we need is a hard money standard and free banking, where each institution is forced to stand on its own two feet. The business cycle would be a thing of the past except in extremely limited local circumstances, and any bank that did not keep adequate stock of specie on hand would eventually collapse on its fraudulent self.

  2. dumpdc says:

    Dear Lumpy:

    Why is prohibiting counterfeiting a pipe dream? Does it take a “large intrusive and overbearing state” to prosecute any other kind of theft? I agree on hard money and free banking, but free banking does not mean that any bank can commit fraud freely. I like the idea of jail time for bank officers and treble damages for counterfeiting.

  3. Gentleman, Gentleman!!
    All of this “ranting and railing” is all well and good. But this behemoth of a situation we are in, started well over 90 years (actually before then) ago.
    It’s in the real CONCRETE DOING of all your thoughts and aspirations. IF they are doable, that we will regain this Magnificent Republic. Not to down play your frustrations. There are those of us who have been trying with different solutions for over 20 years plus now. One positive note is that “The Sleeping Tiger” is starting to WAKE UP. We should now start to get beyond the “Ranting and Raving” stage. “Keep the Faith”…….

  4. Kenneth LeFebvre says:

    I agree that fractional reserve banking can be prohibited as the crime that it is. It only works, today, because we are coerced into accepting Federal Reserve Notes as a valid substitution for money.

    If banks were standalone entities, not part of a “banking system,” they would have to compete for business on the merits of their real services, not just the snazziest online banking system, or ATM refund policy.

    I don’t see any hope for reforming the existing system, though. Not enough people will stand for the inconvenience of tangible currency, rather than electronic ledger entries, unless the general infrastructure of our society also collapsed.

    • dumpdc says:

      I don’t see any hope for reforming the existing system, though. Not enough people will stand for the inconvenience of tangible currency, rather than electronic ledger entries, unless the general infrastructure of our society also collapsed.

      Mr. LeFebyre:

      The concept of electronic hard money transactions has been mated to the gold/silver standard. E-gold is already available. It would be a perfectly workable system along side regular gold and silver transactions. But it would work beautifully as an ATM transaction.

      The present monetary system cannot be reformed, but must be replaced. And when the money fails, the general infrastructure will indeed collapse.

  5. Pearl says:

    Hello,I love reading through your blog, I wanted to leave a little comment to support you and wish you a good continuation. Wishing you the best of luck for all your blogging efforts.

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