@rastinza I though my explanation is good enough for a 3 year old, but apparently not. Banks don't give out any money, they give out promises, that if you need money they will provide. They make various assumptions and predictions, just like anyone else who takes a loan and spends it, or promises to deliver something. If you can't understand these basic concepts I don't know what else to tell you. They might not have 150 today, but they might have it tomorrow when you actually need to cash it, and nobody might ever actually need to cash any more than a fraction of the reserves, unless paranoia like this spreads, or in an actual economic collapse, which will put everything, including the value of said cash, under question, not just the promises of the banks.

@freeschool

@namark
Promise or not promise, this is generating cash which was previously inexistent.
This is detrimental to people who are just depositing money.

Why is letting someone loan money without owning it good anyway?
@freeschool

@rastinza nice to see you finally give up on the condescending attitude of nobody having a clue about how banks work except you and the absolute genius that is Godfrey. I'm also glad that you have otherwise given up any meaningful argument against banks, and are now asking for pro arguments.

Now to address your rhetorical attempts to pretend that you still have an argument.

> Promise or not promise
What the hell is this supposed to mean? "Argument or no argument, I don't care"? You claim banks are giving out more money than they have, which is some kind of an unprecedented con, and my whole point it that they are not giving out money, they are giving out promises, which is a normal thing everyone does all the time all over the place.

literally you: I hate these fruit stand that sells these terrible yellowish-red apples, with thick skin. It's really bitter, you can't bite through it, and the inside are so juicy, it always makes a mess. What a weird GMO freak.
me: it's not an apple it's an orange
you: orange or not orange, I hate these GMO yellowigh red apples! What's the point in having them anyway?

> this is generating cash which was previously inexistent
Once again, they are not generating cash, they are giving promises to provide cash, up to a certain amount, whenever one would need it, on which they make various predictions and assumptions. They don't give out more then a fraction of their reserves to any one entity to make sure that they can cover the needs of many at any given point in time. They constantly grow their reserves, backing it up not just with cash, but various forms of assets that are indeed generated (out of thin air? omg, how is it possible to make something valuable, what magic is this?!) by the businesses they invest in, thanks to all the people who are not afraid to promise things and deliver on those promises.

> This is detrimental to people who are just depositing money.
It is not any more (and is most cases is less) detrimental than giving your money to anyone else for safekeeping, management or as a loan. Otherwise sure, you can sit on your hoard and let it rot, until it looses all possible value it could have ever had, hoping for world war 3 to break out, so that you can finally go "aha, I kept my now totally devalued fiat currency under my pillow, jokes on y'all, once the world is back on track I'm gonna sell it as antiques".

Banks provide relatively low risk (compared to doing the same yourself with various individuals and businesses directly) financial management and investment services, for people who are not paranoid and have better things to do with their life than counting bills and coins over and over gain, and going around shaking up those who owe them.

@freeschool

@namark
I don't understand all this aggressiveness on your side.
We disagree on a point here: depositing money in a bank is neither a promise of getting money back nor an investment.
Depositing money means paying someone to safely keep your money under their pillow.
The money is still yours.

By allowing them to spend money they don't have, this is detrimental for people who are keeping their money there, as they're covering for the risk taken by the bank.

You say you're very happy to see me asking reasons in favour of this system, however you didn't provide any.
@freeschool

@rastinza

> I don't understand all this aggressiveness on your side.
It's not aggression it's ridicule, but understandable how you may mistake it as such, when it hits where it hurts.

> We disagree on a point here: depositing money in a bank is neither a promise of getting money back nor an investment.
> Depositing money means paying someone to safely keep your money under their pillow.
> The money is still yours.
Recall earlier in this thread you were trying to imply that I'm the one here who doesn't know how banks work? What is this now? The full extent of your delusions? There is a term for what you are describing - deposit box, that's when you actually pay for a secure storage in a bank. Otherwise banks always did manage the deposits in any way they wanted, and essentially only gave promises to provide the money when required. You pay negligible amounts for managing your deposits and those are usually covered by returns, because it is in fact an investment.

In general, even if you just wanted someone to keep your money safe and never touch it (like deposit boxes that exits) there is nothing else you can have but a promise, a contract under civil law, that is only enforceable up to a point. If whoever you have that contract with cannot fulfill it because they are terrible at what they do (or circumstantially), there is little you can do about that, regardless of what the contract says.

> By allowing them to spend money they don't have, this is detrimental for people who are keeping their money there, as they're covering for the risk taken by the bank.
Them loaning a money in general, regardless if it fractional reserve banking or not, is a risk that is to be covered by the banks reserves/deposits, and giving out loans is what banks did since forever, and everyone who would spend a second to care would knows this.

> You say you're very happy to see me asking reasons in favour of this system, however you didn't provide any.
I take it you didn't read the last paragraph, or any of it for that matter. Blinded by the burning aggression of snark, you had to avert your gaze of course. Banks provide specific services. If you know of a better way to provide such services go ahead and describe it, otherwise you are literally asking "what good are oranges?", as you refuse to acknowledge them as such, and assert that they are actually degenerate apples.

@freeschool

@namark
I never said you know nothing about banks.
Since I'm talking with someone on the internet I know nothing about, I find it better to write down the whole topic we're talking about, so we have a common understanding of what we're talking about.
If you feel I wanted to offend you in that way, relax not everyone is here to insult you.

Deposits are not investments: you do not get interests over deposited money, you just pay the bank.
Savings accounts are an investment: you're loaning money to the bank, but that's not what I was talking about.

We disagree here: you say the system is what it is, it's fine get over it.
I also recognise the system is this, however I'm not fine with how it works.
I do not have a better alternative, I'm not an economist myself.
I do not have to provide an alternative to state I don't like this system; for example when slavery was common, some people were opposed to slavery since they didn't like the conditions those people had to live through, even though they could not provide an alternative to the use of slaves.

I asked you why, in your opinion, is this system better than letting banks only loan cash they do have. What is the advantage of this system?
You did not reply to this question anywhere in your messages, I thus don't understand your insulting last paragraph.

If you have no interest in talking about this, I see no reason to keep talking. You're frankly quite terrible in the exposure of your ideas and you don't provide much information to think about.
@freeschool

@rastinza
> I never said you know nothing about banks.

you are completely ignoring my points, like you're not even reading anything I have written, past getting insulted by the horrible terrible language that I'm apparently throwing at you, and just repeating the same thing over and over again, which is the condescending premise from the OP that nobody understand how banks obviously con everyone, and you are the genius who figured it out. That's how you approached this conversation right of the bat, go read your first ever statement, and now you are pretending that you are simply trying to disagree weather it's a right thing to do or not, and not educate me on how banks work.

> relax not everyone is here to insult you

you are the only one here who fails to present any actual arguments and repeated call me insulting. I'm just ridiculing your nonsensical rhetoric.

I'm going to repeat the points one last time, feel free to refuse to read them as per usual.

> Deposits are not investments: you do not get interests over deposited money, you just pay the bank.
> Savings accounts are an investment: you're loaning money to the bank, but that's not what I was talking about.
Are you literally going to argue minute details like account types now? You can even basic english words can you? Saving account is not an investment, you need to deposit money to that account. The deposit is the investment. Not to mention that what is usually colloquially refereed to as deposit, without specifying account type, is long term investments with no withdrawal requirement. And what is your actual argument here, that the pennies you pay for account management is good price for safekeeping? Once again, no it isn't, if you want actual safekeeping you pay for a deposit box, nothing is free in this world. Because that was the actual point, not the tangential remark that the returns cover it easily, which you will of course focus on, grasping at straws.

> We disagree here: you say the system is what it is, it's fine get over it.

No such argument was maid, you are only now trying to present this discussion as such.

> I do not have to provide an alternative to state I don't like this system; for example when slavery was common, some people were opposed to slavery since they didn't like the conditions those people had to live through, even though they could not provide an alternative to the use of slaves.

I would imagine whoever opposed the slavery had good arguments for what they were doing. All you have now is "i dun like it", and "please tell me why is it good". The problem is not what condition slaves lived in, freedom is not prosperity, well fed, well dressed and happy slave is still a slave, and you are completely derailing the conversation by this example. The contract with the banks is mutual agreement, and again, despite your condescending attitude, most people do actually understand what they are doing when they sign said contracts.

> I asked you why, in your opinion, is this system better than letting banks only loan cash they do have. What is the advantage of this system?

No. First of all once again, banks don't loan actual cash, it's physically impossible for them to do it most of the time, their loans are promises to deliver cash when its necessary, or whatever else they promise.
Secondly your question about the benefits of the fractional reserve banking was the end of the argument, and you are now derailing trying to make it central.
You actual argument against fractional reserve was that it's a risk, that is to be covered by the banks reserves, that come from deposits. My counterargument is that any kind of loan is such a risk, and if you trust the bank to give out the right kind of loans, make good returns, and not go bankrupt doing that, than there is no reason to not also trust them to predict the returns that they will make, and give out more promises. It is the exact same risk and you either trust the bank to make the right choices or you do not. Now you either don't want banks to loan anything at all, or you have no argument against fractional reserve banking.
If you have actual arguments present them, otherwise I'm not here to educate you on how and why these financial institutions do what they do. Go read wikipedia or something. The obvious practical benefits are that if an individual wants to invest and make returns, the banks provide a cushioning and management service for them to alleviate the risks, that would have been much greater if said individual instead would try to manage cash themselves and strike deals with other individuals or even companies directly, not to mention the enormous time investment and specialization that would require.

@freeschool