Talk:Criticism of fractional-reserve banking

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[edit] Simple Description

No one seems to have put a decent description of how fractional reserve banking works in the article or the main page... Mabye someone could post something to this effect...

A Warehouseman opens a facility of 20 grain elevators, he is in business for several years and develops a reputation for honesty, he proptly reedeems any receipts on demand and without incident. One day our honest warehouseman makes the observation: You know, i always have a certain amount of unredeemed grain in my warehouse, which i could use to make a profit for myself. The warehouseman then forges 2 receipts for grain and sells them to a commodities trader on the stock exchange. Now, our warehouseman only has 20 grain elevators, but he now has receipts circulating for grain in 22 elevators. Our warhouseman is now an embezzler, which is defined as " one who appropriates fraudulently to one's own use what is entrusted to one's care and management." The grain entrusted to the warehouseman was a bailment, that is, it was redeemable on demand in its entirety, it was NEVER loaned to the warehouseman and the warehouseman could not list it as an asset. If he does he falls under the definition given as an embezzeler. Now that he has 22 receipts circulating, suppose the unthinkable happens: all of his customers return for their grain. Our warehouseman is in quite a pickle now, because he has 2 more receipts than elevators of grain. His embezzeling schemes are now uncovered; he has lost his customers trust and he is now insolvent and out of business.

this is a simple explanation of how banks have worked since their inception, and if you read the criticism article and especially the main article, this process is talked about as if it is a legitimate business practice and the problem of bank runs (or grain runs) is not that bankers were embezzeling funds, but that they were found out! And all the government financial institutions do is codify this process. All of their effort is used towards 'keeping the secret' and not allowing the fraud to see the light of day. The way banks work is very very very simple, please dont be fooled into doing laps around the keynesian track of circular logic. This is an easy to understand third-grade-scam, you don't need to take college calculus to figure out how it works. —Preceding unsigned comment added by 66.235.89.68 (talk) 16:30, 15 May 2008 (UTC)

Believe me, the detailed explanation of the fraud/embezzlement was there - before Gregalton and Zenwhat killed it off. My experience on these pages has been truly bizarre. It's as if these editors are both hiding under a glass table secretly whispering to each other: "Sssshhhhh! Perhaps if we keep deleting stuff our brilliant scam will never be discovered and we will rule the world!" - while the rest of us are going about our daily business, knowing of their childish game, looking on in disbelief that they can be so childish.
The reason that frb still exists is that if you try to lift the glass table and laugh at them, they call you all sorts of nasty names, start screaming you're a commie or a fascist or a nazi - and if you really threaten them they really will kill you. So the ridiculous fraud continues with a tiny minority of frightened psychopaths in our midst hiding under their diamond-encrusted glass tables, with most of us sniggering behind our hands but too gutless to kill them (and frb) off for good.
The really interesting question is no longer the nature of the fraud (any idiot who googles "Murray Rothbard" can do that), but rather answering the intriguing question: what happens if the fraud continues? Most people stop when they realize the fraud and say "this has to stop, this is stupid and ridiculous and criminal and insane!" That boat has sailed - your government HAS ALREADY been taken over. The Constitution only allows gold and silver to be legal tender and guess what - it isn't! Are you going to believe the bankers - or your own eyes? The counter-revolution has already happened. Gold is in the vaults of...you guessed it...the BANKS!!! They have ALREADY stolen the grain - ALL OF IT.
Now we have to live with the fraud, or else some scenes from The Godfather will be replayed right in front of your face. Our parents or grandparents allowed this to happen and now (as the Mogambo Guru says) we are freaking doomed.
This article is about what happens when the fraud continues for a long time, with government support, and community acquiescence. And the simple answer is that prices get HUGELY distorted by debt: asset prices (especially residential land) experience hyperinflation and consumer goods experience deflation, and food stays strangely cheap - until it is not available at all. And a few rich stupid bankers take over a corrupt government and the rest of the populace sinks into debt slavery until the whole stupid game collapses. That's what Ludwig von Mises called a "final and total catastrophe" of our fiat money system, and this has happened in the fall of the Roman Empire, Weimar Germany, Argentina, post-Soviet Union, Manchu China, John Law's France - in other words, lots of places. It happens all the time. And it's happening again right now, before our very eyes. It's fun when bankers take over government, isn't it?
But please don't think this article didn't have this stuff in there. It did. And the children wanted to stay under the glass table and pretend we didn't know "the big secret".--Socppt13 (talk) 07:00, 16 May 2008 (UTC)

[edit] Cites for Conventional Economic Analysis

I'm back. I was condemned to solitary confinement for a week due to my "shouting" during etiquitte class. I was confined to a dirty third class cabin of S.S. Titanic and it was not a pleasant experience I can assure you. Rats everywhere. I even saw some of the biggest rats actually leaving the ship whilst I was locked up in that filthy hole (they were carrying euros and Swiss francs and gold bars and muttering something in Pidgin English about "gold leasing from the Fed" and "scam" and "suckers". What the Hell was that all about? They also pointed and exclaimed "that way to Mont Perilous"... or "Mount Philistine"... or something like that. God knows what they were on about but they wanted to get the Hell off the boat quick-smart, that's for sure).

Anyway, the reason for my comment is that I've been observing the slow descent of this article into anodyne rubbish (it's been like watching evolution in reverse), and I've been AMAZED no one has had the time (or the guts?) to provide citations for the conventional economic analysis section. It's sitting there as naked as an innocent little girl in a Seymore Butts film. If it's so "conventional" where the Hell are all the cites? Where is a disciple of "pretty boy" Keynes when you need one? Where are the rational expectations dudes with their Lucas equations? Where are the neo-classicalists? Come on, stand up for yourselves! Don't take this lying down. Austrian Economics has been marginalized and ridiculed for decades. Now is the time to show us what you're made of. There are so many of you in tenured academia and yet NOT ONE OF YOU has had the guts to comment or provide references on the conventional stuff. Shame on you. Where's your courage? You guys are yella.--Karmaisking (talk) 09:11, 10 January 2008 (UTC)

Cites provided.--Gregalton (talk) 15:59, 11 January 2008 (UTC)
  • "virtually all banking systems worldwide operate on some form of fractional reserve banking, and full-reserve banking is often considered 'hypothetical.'"
The above statement is false and should be balanced. Most countries on modern currency boards have held full commodity reserves for their currencies .. a notable example would be Hong Kong. BigK HeX (talk) 06:13, 12 February 2008 (UTC)
You are confusing the banking system with the currency regime. The Hong Kong Monetary Authority does hold full reserves for all of their notes issued; commercial banks operating in Hong Kong do not hold full reserves against all of their deposits.--Gregalton (talk) 12:27, 12 February 2008 (UTC)

[edit] Gregalton gets active (again)

Dearest Gregalton, given the "heated" discussions above regarding your compulsive deletes and edits on this page, how about you discuss further deletions here rather than continue the slaugher unilaterally? Also, how about REFERENCING you own work of "genius" - the "Conventional Economic Analysis" section - first, BEFORE you attempt to scale Mont Perelin? Do NOT delete without discussion here, given your proven track record of recidivistic deletion activity.--Karmaisking (talk) 22:57, 10 January 2008 (UTC)

Actually, in this case the discussions above clearly support extensive deletions. Please do not reinsert w/o discussion here. And please try to be civil.--Gregalton (talk) 23:05, 10 January 2008 (UTC)

[edit] Lede alterations

I replaced a reference with a fact tag because it did not make the claim the article reported. I replaced "paper currency" with "representative money". Fiat current and representative currency are the "two kinds" of money, whereas "paper currency" can be either government-backed or convertible to specie. 06:11, 12 February 2008 (UTC)

[edit] Friedman et al claims

I'd be grateful for a source regarding Friedman's criticisms of fractional reserve banking.--Gregalton (talk) 17:38, 12 February 2008 (UTC)

He was very critical of Federal Reserve policy but was not as up-front as Murray Rothbard on the "parasitic" evils of fractional reserve banking. However, he was clearly supportive of the "controversial" information contained in the "Money Masters" videos, which was extremely critical of unhinged frb. His support of the Monetary Reform Act is mentioned here. No doubt others can find more "reputable" sources for his criticism of the Federal Reserve (which he clearly accused of causing the Great Depression).--Karmaisking (talk) 03:34, 13 February 2008 (UTC)
This does not seem to constitute criticism of the concept of fractional reserve banking. I've taken a look at his monetary history of the US, and can find no clearly critical statement on this. I'm removing until something can be found.--Gregalton (talk) 09:53, 13 February 2008 (UTC)
Milton Friedman was more a critic of intervention from the Federal Reserve than a critic of fractional reserve banking. Friedman would probably agree more with "free" banking than full-reserve banking. Although, he showed support for monetary reform, there is no evidence (that I could fine) that he agreed with the proposal of full reserve banking. --EGeek (talk) 07:10, 14 February 2008 (UTC)

I'm new to wikipedia but would just like to point out that Friedman did support full-reserve banking:

"As a student of Henry Simons and Lloyd Mints, I am naturally inclined to take the fractional reserve character of our commercial banking system as the focal point in a discussion of banking reform. I shall follow them also in recommending that the present system be replaced by one in which 100% reserves are required."

Milton, F., A program for monetary stability, New York, Fordham University Press, 1960, pp. 65

I'm surprised to see opponents of fractional reserve banking as cranks and non-mainstream, seen as there is a long history of opposition to it(See the social credit movement) and many mainstream economists (such as Milton Friedman) oppose it. Jamalloyman (talk) 19:28, 26 March 2008 (UTC)

Did he meant 100% reserves for central or for commercial banks? --Doopdoop (talk) 21:58, 27 March 2008 (UTC)
In optimum quantity of money page 83, he seems to be taking a more nuanced view (emphasizing how much he disagrees with Simons). As far as I can tell from brief research, he seems to be saying full reserve only on demand deposits. As some have discussed, this version of full-reserve banking doesn't change much: it's easily subverted/avoided by money market accounts and the like. Remember, there are different types of money, and (save cash and reserves) all the other components (M1 through 57 or whatever we're up to now) are money substitutes. The distinction is (even in Friedman's words) somewhat arbitrary.--Gregalton (talk) 15:25, 28 March 2008 (UTC)

Thanks for the link Gregalton. Much appreciated. However I think his opposition to Simons is based more on how the reform would be implemented rather than on the reform itself. Friedman still writes that "I agree with Simons on the desirability of 100% reserve banking" (page 83). I think that when Friedman writes about this reform he is referring to M3 (ie: demand deposites etc. like you said) but I don't think it would be easily subverted if there was a law stating 100% reserves were required... Also, thankyou to however moved my original quotation from the auto-archiver, my apologies. Jamalloyman (talk) 15:56, 28 March 2008 (UTC)

Freidman favored a central bank though. Very confusing... 81.227.12.92 (talk) 10:31, 28 April 2008 (UTC)

I think the other part of this that's easily neglected is that it's entirely possible that Friedman changed his mind. People keep bringing up Greenspan as a supporter of the gold standard (going by a 1962 paper he wrote), whereas he later admitted that a well-run central bank was "close" to a gold standard and more flexible. Friedman's own rule-based monetary policy was a central bank with decision points removed (autopilot).
I can't remember who put it this way and I'm paraphrasing, but someone said the problem is that a well-run central bank is superior to any mechanistic approach (such as gold standard); this is met with the argument that central banks will be badly run, so a rule or system is needed to prevent this; but a badly-run central bank or govt can subvert the original rules (break the link to any standard, for example) at any time.
One could argue (Krugman has) that Greenspan had the same problem with regulation: by ideology, he believed all regulation would be subject to problems, and so refused to enact/enforce regulations even when they were obviously needed, were within his powers, and would be net positives.--Gregalton (talk) 14:53, 28 April 2008 (UTC)
Or, more succintly put, all systems that have experimented with unfettered fractional-reserve banking have failed. Badly. And the current U.K./U.S. "experiment" (started in 1694/1913 and ending...soon?) will fail also. In worldwide starvation (bees dying + bats dying = starvation) and toxic, irredeemable, pollution (check out your local freshwater creeks and rivers - tell me I'm lying). Has any "civilization" destroyed fertile arable land more quickly than the Anglos? Can someone research this and comment, because I can't believe any "civilization" has done this more quickly than the rump of the cannibalistic "British Vempire" (including the post-Fed U.S.).--Lagrandebanquesucre (talk) 11:12, 2 May 2008 (UTC)

[edit] Please, I don't want to fight you (but I will if I have to, and I'll have fun doing it)

Ummmm - is anyone actually suggesting "unfettered" fractional reserve banking (except for the free banking enthusiasts)?--Gregalton (talk) 12:52, 2 May 2008 (UTC)
Yes, the Fed, actually. There have been no meaningful reserve requirements since 1995. Sweeps and zero reserves on non-transactional accounts took care of that. Joebob2k6 (talk) 09:04, 15 May 2008 (UTC)
"Unfettered" is perhaps not apt. I mean "unfettered" not in the sense of "completely unregulated" but in the sense that it is unchained from any real prospect of the money supply reverting to its previous lower level. It is "unfettered" (not unregulated - unfettered) in the sense that frb is unhinged from gold/silver or any other stable asset, thereby killing off any prospect of reversion to a stable money supply, as occurs in a gold standard economy, where after the "party" of funny money games and musical chairs inevitably stops, the bankers die along with a fair section of the real economy and everyone (bankers included) revert to "zero" and start over again - with savers rewarded with sky-high real interest rates and asset prices coming back once more within the reach of the (unleveraged) middle classes. Arguably (and let's not argue the point here - we're all dying of boredom at this point), a gold standard "anchors" the money supply, and kills off the ability to perpetually increase the money supply through frb. Free banking is obviously the extreme end-game of "unfettered" frb but once the link from gold is removed, frb is unconstrained by the theoretical "threat" of reversion back to "zero", and can slowly grow (or should that be kill?) an economy through surreptitious (or should that be insidious?) inflation (or debasement) of the currency, thereby getting the "do-ers" (or working classes) back on the treadmill and away from the accumulation of real savings (gold/silver) which would otherwise allow them to retire early in relative comfort (God forbid!). "Unfettered" is perhaps not an apt term, but someone needs to capture the way in which frb inflates the economy on a sea of rising, interlocking debt-claims and in doing so drowns the economy in debt and perpetual, force-fed economic growth - until it all collapses when the real economy cannot continue to grow exponentially forever, at which point the economy collapses into a kind of holocaust of mutually assured bankruptcy (MAB). Sometimes, the collapse is triggered by a sustained period of suicidal environmental destruction due to mindless overconsumption, or (more often) a land price collapse, or (much more often) simply losing a war. Throughout history, losing a war = confiscation of treasure (gold and silver in particular, but oil and opium have also become popular recently) + government bankruptcy + debt slavery.
If I can be frank without being barbaric, I frankly don't like your first sentence. It sucks. And given you hate the very existence of the article anyway, I frankly see no reason why you should be the one to decide what "debt-based monetary system" means. It means what critics say it means (whether it's an accurate criticism or not is beside the point). I'm therefore going to carefully revert and hope you don't have an issue with that. If you do, it will be a long night...--Lagrandebanquesucre (talk) 05:49, 3 May 2008 (UTC)
I think the version inserted is tendentious and POV. Your long para above makes the same mistake of confusing the currency regime with the banking regime.
And, while I don't mean to exaggerate your sentence, I'd appreciate it if we could avoid phrasing like "fight but I will if I have to and I'll have fun doing it"). There's no need.--Gregalton (talk) 14:02, 3 May 2008 (UTC)
Believe me, there's no confusion. I understand exactly what you're saying and, frankly, you're dead wrong.
Those who use the term "debt-based monetary system" are referring to the "monetary system" in toto - both the currency regime and the banking/regulatory regime combined. To think that both exist independent of each other is, frankly, a strange (some would say tendentious) comment. To take an obvious, self-evident example: a gold standard monetary system would greatly constrain frb, resulting in periodic (some would say catastrophic) deflations. Similarly, I speculate that if banking regulations required all managers/directors of banks to be personally liable for the banks' liabilities, I am sure the move away from gold would have been a slow and cautious one. Fiat currency is loved by bankers and governments around the world, because the issuance of non-asset-based currency can allow M0 to "catch up" with the growth of M3 if the citizenry panic and start stampeding back to the tip of the pyramid by trying to pull real money out, Northern Rock-style. Interestingly, it appears that as money has moved further away from being asset-based (first gold was killed off, then coins were debased, then paper money was replaced by "electronic" or credit card-money) each "evolution" of debt/credit money has grown exponentially faster than the last. So it is irrefutable that both interact with each other and that the choice of currency regime will have a profound impact on the banking system. It's so obvious I'm surprised this needs to be explained: The currency regime is intimately connected with the banking regime.
Now, having established that, those who use the term "debt-based monetary system" are not necessarily criticizing frb alone. As you rightly point out, someone like Antal E. Fekete strongly supports a return to the gold standard and the opening of the Mint to gold and silver, but is not in any way opposed to fractional-reserve banking (provided, as you say, it is done "right"). At the other end of the spectrum, you have somebody like Stephen A. Zarlenga who is perfectly OK with government issued debt-free fiat currency but wants to severely constrain private frb. Both come within the scope of this article, but have radically different solutions to the problem.
Critics use the term to refer to a currency/banking/regulatory/financial "system" where the issuance of new "money" is dominated or predominantly controlled by the private banks. This requires (1) a fast-growing, easily convertible, non-asset-backed monopoly currency (2) frb to be privately owned and controlled, legal, socially accepted and lightly regulated (3) the constant, perpetual acquisition of marketable commodities (land, resources, human debt-slaves, otherwise known as immigrants) and (4) a pool of gullible, compliant sucker...sorry...savers/depositors either at home or overseas (either domestic, non-gold hoarding suckers, or dumb foreign government bond-buying suckers will do).
Note that these critics may have it all wrong, may have little understanding of monetary economics, may in fact have serious mental disorders bordering on psychosis. Whatever. Regardless, this is what they are referring to when using the term. Whether they are attacking a straw man or Superman is not the issue. That is what they are referring to when they use the term. I hope this long, detailed, considered explanation has justified my revert. Please provide a detailed refutation if you disagree. And sorry about the joke. I am becoming unsubtle in my old age.--Lagrandebanquesucre (talk) 03:53, 4 May 2008 (UTC)
Since the gold standard co-existed with fractional reserve banking, how is it that they are not independent?--Gregalton (talk) 04:18, 4 May 2008 (UTC)
Come on, let's be serious. "Co-existed" is a gross exaggeration. It was never a "peaceful" co-existence. The term "co-exist" suggests "living together happily" and that mischaracterizes history terribly. As is clear from the cite in the article which details the thousands of banking collapses throughout history, and this Guardian piece, the gold standard and frb never had a peaceful co-existence. It was a violent, tempestuous, mad fight to the death - which was ultimately won by frb and the private banks. Which is why we no longer have gold in circulation, and why it was removed (forcibly) by nearly all governments around the world - including Roosevelt in the U.S. under instruction by...you tell us Gregalton.--Lagrandebanquesucre (talk) 04:51, 4 May 2008 (UTC)
I'm not making claims about how good or bad the coexistence is or was. You claimed they are not independent choices, which is not true. Neither have the causes of the instability you refer to been demonstrated to be fractional reserve banking or the combination with the gold standard.--Gregalton (talk) 17:25, 4 May 2008 (UTC)
In our money system, there is no difference between the currency and banking regime. If a bank makes a loan, money is created, if the treasury issues a bond, it is bought by the fed with money just created. The moment this system was instituted, the gold standard became theater. That is why FDR confiscated domestic holdings, and Nixon closed the foreign gold window. Joebob2k6 (talk) 08:26, 15 May 2008 (UTC)

This draws out some of the interactions between choice of currency regime and monetary crises, but is very narrow (myopic?) in its scope (as is true for most academic economists). This also talks about similar issues. The gold standard is now so discredited in academic and institutional circles that it is virtually impossible to find anything about choice of currency regime beyond the usual "fixed/floating" fiat currency blah, blah, blah, such as this bland little speech and this turgid IMF research paper. This does the usual post-mortem on the Asian fiancial crisis, but doesn't get very far. This is perhaps more useful in that it explicitly links the currency regime, capital controls and banking crises. This irreverent, witty, piece by "True Compass" Gary North gives a nice insight into the policy problems the current Federal Reserve is facing within the current regulatory/financial regime. However no one has really done a good job of drawing out the very complex interactions between choice of currency regime and banking regulation. It is perhaps a fertile ground for further research. It appears obvious (at least to me) that deregulation of the banking sector has been facilitated by the "morphing" of money from hard and real to soft and ephemeral. In other words, as money has moved from asset-backed and tangible to electronic and symbolic, this has allowed fractional-reserve banking much freer reign and the regulatory regime has been loosened to accommodate this sleight of hand. However no one in academia looks at these things from a distance - they're always butting their heads against the latest monetary fad - so no one has the broad sweep of history in front of them. Except perhaps non-academic economists like Antal E. Fekete and Stephen A. Zarlenga, who do have that broad sweep of history in their writings, and who do appreciate the interaction between choice of currency (hard/soft) and banking behavior and the reflexive, Pavlovian, zombie-like oscillations in the financial regulatory environment - which generally has perfectly predictable, mindless, robotic, repetitive decade-long swings between two extremes: Glass-Steagall Act tight/morally upright/Bankers = $atan, and Clintonesque Gramm-Leach-Bliley Act loose/what are morals?/Bankers = Gods. Of course, given the shallowness of the analysis always undertaken after the latest financial collapse and the "spin" that accompanies the inevitable bubble blow up to hide what really happened (which at its heart is always a form of simple, not-very-smart monetary fraud), neither policy extreme ever deals with the heart of the dilemma and bites the bullet and makes the REAL choice between: (1) killing off frb and issuing debt-free govt fiat as Zarlenga/Rowbotham/Brown advocate, or (2) letting the market for gold and silver rip, and opening up the Mint, as Fekete/Paul/Daughty advocate. Fekete goes for gold because he thinks that cures most banking idiocies. Zarlenga goes for government issued debt-free fiat currency and the slow suffocation of private frb because he doesn't want to see the catastrophic deflations that occur with gold, but also doesn't like the implicit debt slavery of the working populace that he believes inevitably occurs with privately-controlled "corrupting/corroding" frb. Both however clearly see the interaction I'm talking about. The fact that you don't see it is sad, but then so many don't see it, it's hardly surprising you don't either. Those who do see it generally end up marginalized. Or dead. I'd love to see some research on how government-issued debt-free fiat currency has gone through the ages. Obviously there's stuff floating around on greenbacks and Kennedy bills, but it's devilishly difficult to find "reputable" academically-endorsed stuff on this topic for some strange reason. Stephen A. Zarlenga and Ellen Hodgson Brown and Michael Rowbotham all refer to these brief interludes with "genuine" fiat (which have all been violently killed off, at least to date), but no academic economist (that I know of) has analyzed the economic performance of these economies. If anyone has seen anything "reputable" on the topic of debt-free government-issued fiat money, I'd greatly appreciate hearing from you. Gregalton perhaps?--Lagrandebanquesucre (talk) 02:58, 5 May 2008 (UTC)

This seems like a lot of writing to say that you're not happy with the current state of reliable sources. Regrettable, perhaps, but that really has very little to do with an encyclopedia or encyclopedic content.--Gregalton (talk) 17:17, 5 May 2008 (UTC)
Well, it has this much to do with it: The first sentence of this "fringe" article should stay as is. The "fringe" writers of questionable reliability and integrity (Zarlenga, Rowbotham, Brown, Fekete, North, von Mises, Rothbard) would, I hope, all agree.--Lagrandebanquesucre (talk) 23:31, 5 May 2008 (UTC)
Current version links to private banks, which (if you read the article in question) has little to do with it. It is also pretty standard to use the expression in the title of the article in the first sentence to make it clear. I'll try to do a compromise edit and see if you can live with it.--Gregalton (talk) 04:54, 6 May 2008 (UTC)
Again, I know what you mean, but the English terminology has lost any distinction between "nationalized govt-owned" banks and "private" (meaning non-govt owned) banks. Look at the last sentence in private banks and that explains exactly what I mean. I'd leave it as is. Alternatively, if you can find an expression for "non-government-owned" banks which doesn't sound turgid, use it. The distinction matters because some monetary reformers would be more relaxed about frb if it was govt owned (however, it appears that most non-gold standard monetary reformers would want to completely avoid the cyclical silliness of "mad" frb and simply issue debt-free fiat and have close-to-full reserves, which is Stephen Zarlenga's position)--Lagrandebanquesucre (talk) 02:13, 7 May 2008 (UTC)

[edit] Auto-archiving

I've established an auto-archiver here. Much-needed.--Gregalton (talk) 09:25, 26 February 2008 (UTC)


[edit] Why so many deletions?

sorry, I tried to read this article but somehow it is now edited so that there is no information as to what the real (or even any) criticism is of fractional-reserve banking. Instead, there are a lot of confusing statements that point to somebody's idea that there is no such criticism. Please restore the original history with accurate citations, or just remove the whole article if you can't agree. —Preceding unsigned comment added by 70.127.124.69 (talk) 23:07, 14 March 2008 (UTC)

You (obviously) haven't read the archived talk pages. The decision on deletion of this article was negative (the decision was "To Keep"). However, several editors decided that much of the "explanatory" material was unnecessary or original research, and so that explanatory material was deleted. You can still access it via the history pages if you wish; however there was a consensus decision to delete around 90% of the earlier versions of this article and no one has made a material contribution since some of the principal editors left/were barred.--Lagrandebanquesucre (talk) 06:58, 15 March 2008 (UTC)
The original article "Debt-based Monetary System" was written mostly by a single editor who only used a few reliable sources - most were blogs or gold bug sites. This particular editor was permanently banned from Wikipedia due to continued violations even after several warnings and temporary bans. Since this article only explains one type of criticism of fractional reserve banking, either a merge into the fractional reserve banking article or a merge of the criticism section from the fractional reserve banking article to this article should be considered.--EGeek (talk) 16:01, 16 March 2008 (UTC)

[edit] "Money as Debt" as an External Link

It's an interesting question whether "Money as Debt" should remain as an External Link, even though it has been deleted as a stand alone entry in WP itself (apparently on notability grounds). Does anyone know whether there are any WP guidelines on whether something can stay in as an External Link, even though it has been deleted as an entry on WP itself? Even though it may not be notable "enough" to live as a stand alone entry on WP, an External Link may still provide useful explanatory background to the article itself - provided it is not spam, or defamatory etc. No one has suggested that "Money as Debt" is inaccurate or defamatory or spam. It has been accepted as fact-based and informative, but has been rejected on the grounds that it is "fringe" and therefore not sufficiently "notable". I assume there is greater latitude given to allow a "trivial but informative" External Link? Is this correct? This is an interesting (albeit somewhat archane) question which an expert on WP guidelines could perhaps explain. In the meantime I've reinstated the External Link to "Money as Debt" but obviously not added it back as a "See Also" internal link.--Lagrandebanquesucre (talk) 08:40, 16 March 2008 (UTC)

See external links. I see no reason to include this. It's not notable, it's factuality has in fact been questioned. The site also seems to be advertising for the DVD of the movie, not a review or commentary on it. As such, I'm deleting the link.--Gregalton (talk) 08:52, 16 March 2008 (UTC)
Fact-based? I'm sorry, no. I stopped watching this "documentary" after it stated that banks could make a $10,000 loan from only $1,111.12 of deposits (creating $100,000 from the multiplier effect) due to a 10% reserve ratio (9:1 ratio in the movie). Based on what I read from synopsis and reviews, the rest of the movie might as well discuss UFOs. There is a reason beyond a simple coverup conspiracy why this movie is not discussed through reputable and reliable channels; thus, leading to its non-notability and exclusion from Wikipedia. Also note that this article was deleted on grounds of notability, not "fringe". Based on policy, Fringe articles are not excluded from Wikipedia unless they are not notable.--EGeek (talk) 15:37, 16 March 2008 (UTC)
If you can be troubled to go to the fractional reserve article on Wikipedia, you will see that there is nothing at all wrong with the math in the video, which is finance 101. 10% reserves is a 9:1 multiplier ($1 in $9 out + $1 held in reserve). 1111.12 is 10,000/9 rounded up. Example: 100 dollars are put in an account. 10 are held in reserve, 90 are loaned on to next account. 9 dollars are held in reserve, 81 dollars are loaned on. 8.1 dollars are held in reserve, 72.9 are loaned on. etc. this is an infinite sum, but we only need around 40 iterations at 10% reserve to capture most of the multiplier, which is 9. This is in the Wikipedia article. Joebob2k6 (talk) 10:03, 15 May 2008 (UTC)
You missed my point. Yes, the multiplier effect would allow the initial deposit of $1111.12 to increase to $10,000; however, the video stated that the bank can immediately loan out 900% ($10,000) of the initial $1111.12 deposit. Then the video begins the multiplier effect based on that amount to reach $100,000. The problem with this logic is a bank can not loan out more than it has. The bank could only loan out $1,000 (90% of $1111.12), not $10,000. The multiplier effect does not change this fact. --EGeek (talk) 04:57, 16 May 2008 (UTC)
You say, "a bank can not loan out more than it has"? I am not sure what you mean. There is no question that a bank that receives a $1000 deposit can loan out $9000 more dollars, using fractional reserve. The video is asserting that the fed is also loaning at fractional reserves. Is this what you are claiming is not true? As far as missing your point? I doubt it. Your point was that the video had its facts wrong. you gave an example. Your example, and subsequent defense have not supported your allegation. Joebob2k6 (talk) 10:52, 17 May 2008 (UTC)
If a bank has $1000 in assets it can not lend out $9000 in assets. It is simple accounting. The bank would need either $9000 more in liabilities(loans or deposits) or capital(investments), which would also add $9000 more to its assets, to make this loan. I was not talking about the fed, this article is on fractional-reserve banking criticisms, not the Federal Reserve. --EGeek (talk) 05:34, 19 May 2008 (UTC)
Yes it is simple accounting. The $1000 is the reserve and the $9000 is the amount of new loans that are permitted. If you ran the bank and used only one account instead of chaining them, you would be laughed at as a rube, and fired. All banks are permitted to loan at fractional reserve, which is actually less than 3% on transaction deposits, which are the vast majority, so the multiplier is far more than 10. It is practically closer to zero reserves due to sweep accounts. Your promise to pay back the loan plus any lien they can get is the asset they book. I keep asking you to go read the wikipedia page on fractional reserve banking, have you seen the table? Or you can read the Fed's own documents on their site, like I do. Joebob2k6 (talk) 05:56, 21 May 2008 (UTC)
The most elementary formula in accounting is: Assets = Liabilities + Capital. When a deposit of $1000 is made in a bank, the $1000 cash is the assets and $1000 demand deposits is the liability. If the bank wants to make a loan of $900, it would credit $900 cash and debit $900 for the loan. So the Assets($100 cash + $900 loans) = Liabilities($1000 demand deposits). For a the same bank with a $1000 deposit to make a $9000 loan, it would need at least $8000 more in assets. Even if $8000 in assets magically appears, $8000 in liabilities(loans or deposits), $8000 in capital(investment), or a combination of both must come from somewhere. --EGeek (talk) 05:12, 22 May 2008 (UTC)
your promise to pay is the asset offsetting the loan. Did you know that when you open a visa card, your max limit is counted as a bank asset?Joebob2k6 (talk) 09:51, 22 May 2008 (UTC)
The max limit is also counted as a bank liability that decreases as charges are made to the card. So what bank liability offsets the bank's loan asset above the initial deposit? --EGeek (talk) 03:29, 23 May 2008 (UTC)
As I said, "the bank would need either $9000 more in liabilities(loans or deposits)..." In other words, each loan the bank made would have to be deposited back into that same bank for the multiplier effect to occur. If the loan of $900 is used to buy something, the merchant may deposit that $900 into the bank again. At this point the bank would have assets of $1,000 cash and $900 in loans, and liabilities of $1,900 in demand deposits. Assuming 10% reserve requirements, the bank would need to keep $190 (10% of $1,900 demand deposits), so the bank can make a loan of $810 ($1000 cash - $190 required reserves). This only continues if the resulting loan is deposited into the bank. Apparently, Analoguni's tables are confusing some editors (and I seriously mean no offense - this is useful information) and a simpler approach needs to be taken. I will post this issue on the Fractional Reserve Banking discussion page unless I misunderstood you. --EGeek (talk) 05:12, 22 May 2008 (UTC)
I believe it is legal for the banks to chain deposits within themselves, but from a higher level, it does not matter if banks trade the loans between each other or keep it in house as the net add to the money supply is the same. As you can see from the mechanism, debt is indistinguishable from money, they are really the same thing. Regular banks create and destroy money every time they create or retire a loan. Since they create 1/reserve times more money than the fed creates, that means most inflation is caused by private finance, not direct government spending. I think you should watch the whole video and then check it with other sources. It will check out, and you will be the wiser editor for taking the effort.Joebob2k6 (talk) 09:51, 22 May 2008 (UTC)
Are you saying that a bank can make a single $9,000 loan from a single $1,000 deposit, or did I misunderstand? --EGeek (talk) 03:29, 23 May 2008 (UTC)
Your right about reserve requirements in the United States. Other countries depend on their on their own central banks or equivalent authority for reserve requirements. For example, The People's Bank of China currently requires a reserve ratio of 16.5%. --EGeek (talk) 05:12, 22 May 2008 (UTC)
Just for the record, you are exactly right EGeek. As always your attention to detail is beyond compare (but your ability to see the "big picture" is, perhaps, somewhat impaired). The video exaggerates the nature of the "fraud" (to use Murray Rothbard's blunt term). You correctly point out that the "fraud" is slightly more subtle than the video depicts. The "big picture" point is whether frb is fraudulent. Some say yes. Others are Keynesians.--Socppt13 (talk) 14:32, 16 May 2008 (UTC)
Hi Karma. I won't deny that fraud occurs in the fractional-reserve banking system; however, a full-reserve banking system will not solve this problem. I fail to see how a discussion about basic banking principles turns into a discussion about bankers conjuring up money from thin air. I don't live in a world of wizards and sorcerers; I live in a world of science and math. The multiplier effect is a simple mathematical effect of money whenever a loan is created (under a full or fractional system). I also fail to see how fractional reserve banking is a Keynesian idea since it existed long before John Maynard Keynes. --EGeek (talk) 04:31, 17 May 2008 (UTC)
Thanks EGeek. You are the only contributor throughout this mess who has genuinely impressed me. Your research abilities and attention to detail are simply incredible. And your sense of fair play in the midst of the chaotic debates was very refreshing. I am in deep admiration of the purity of your intellect.
However I do feel you tend to take things too literally. My last comment was a joke. I have major "issues" with neo-Keynesians, which dates back to my economics thesis, where my "groundbreaking" analysis of probability theory from a subjectivist Austrian perspective was trashed mercilessly by my professors. I admit I am still scarred by the experience.
Getting back on point (and I have to be quick before I'm killed off again), you say: "I won't deny that fraud occurs in the fractional-reserve banking system; however, a full-reserve banking system will not solve this problem. I fail to see how a discussion about basic banking principles turns into a discussion about bankers conjuring up money from thin air."
How can you fail to see that a discussion about basic banking principles always (eventually) turns into a discussion about "bankers conjuring up money from thin air"? That's what frb does! The definition of "money" is so crucial here, so let's go through this carefully. With gold, the fraud is much more obvious, so let's stay with that. With a gold standard and frb, "real" money is slowly (insidiously?) replaced with an inferior "representation" of money (paper certificates) which ITSELF is then used for commercial transactions - which then becomes a form of money, but which grows faster than the "true" monetary base (gold). It's a very simple, very obvious example of Gresham's Law. That in itself is a form of "sorcery"! How can you not see it? As Gary North points out here, central bankers are simply second-rate illusionists, trying to maintain the credibility of the monopoly currency whilst knowingly debasing it through periodic bank rescues and monetary inflation - and by being relentlessly vigilant in seeing to it that the populace does not use the "real" monetary core (gold/silver) as money - which would effectively bankrupt the financial system in no time BECAUSE of the "sorcery" NECESSARILY associated with frb. Bankers are nothing but second-rate illusionists, replacing "real" money with fake and getting their brave indebted clients/entrepeneurs/gamblers/innovators to go out on a heroic but futile mission to find "real" money that is disappearing like a mirage - thereby profiting from its replacement every time Gresham's Law is applied - gold, then lower value metal coins, then paper, then credit card debt, then...then...then what? Bankers simply ride on the back of hope and profit when hope turns to despair.
If you can find anything on the economic performance of economies which have restricted frb and issued debt-free govt fiat from the Treasury please find it for me. I know you're the very best man for the job. The only question is: Will you?--Socppt13 (talk) 10:25, 17 May 2008 (UTC)
Your reasoning that this is fringe because it is not on mainstream news is circular. The reason that it is not on mainstream news is that people get upset when they find out that rich bankers are making up money and causing inflation. You do not see any mainstream coverage of naked short selling either. Is that also fringe? You will see this story on TV someday, but by then it will be old news. Joebob2k6 (talk) 10:03, 15 May 2008 (UTC)
You are taking the notability concept to absurd lengths. If there can be a link to "Webster's Wobbins" - a blog on birds, and if there can be a detailed essay on Bizarro, the comics supervillain, then I think there can be a link to a site about the history of central banking. If you want to try to impeach that video, knock yourself out, but you will not get anywhere. It is more solid than 99% of mainstream news reports. Joebob2k6 (talk) 10:03, 15 May 2008 (UTC)
Welcome to Wikipedia. Please read the nobility guideline. If you or anyone can find 3-4 reliable sources (not blog, goldbug, conspiracy sites, etc.) then there is no reason (even for "fringe" topics) that it should be excluded from Wikipedia. Others may disagree, but the core policies are clear on this matter. --EGeek (talk) 05:37, 16 May 2008 (UTC)
_You_ need to read the notability guidelines. They explicitly state that notability is not a popularity contest, a link counting contest, or anything like that. This video would meet the notability standard for a page on criticism of fractional reserve banking even if it had a mistake, and was linked by no-one.Joebob2k6 (talk) 10:52, 17 May 2008 (UTC)
It also says that nobility is distinct from "fame" and "importance". I use 3-4 reliable sources as a rule of thumb. Normally, 3-4 good reliable sources provide significant coverage of a subject or topic for an article. There are more specific guidelines for films and internet content, but they don't differ much from the general guidelines. Also, no sources at all will not help your case. --EGeek (talk) 06:04, 19 May 2008 (UTC)
Thank you for confirming the arbitrary bias. The video is obviously notable within the field of fractional reserve criticism, and that is what this article covers. Threatening to camp-edit anyone that tries to add the link, but who will not submit 3-4 links to you from places that you arbitrarily approve of is a clear violation of NPOV policy. Since you have already shown that you are ignorant of modern banking practices, maybe you should not be so aggressive about what others can and cannot link to. Joebob2k6 (talk) 05:56, 21 May 2008 (UTC)
In other words, if you can find "mainstream" academics or govt or IMF officials who support your views on a monetary revolution, we can add them to the article. (Chances of finding one of those: 0.00%).--Socppt13 (talk) 14:26, 16 May 2008 (UTC)
I don't really know what "my views" are, since I never stated them. What are "my views", so I can support them. By the way, Milton Friedman, Nobel prize winner in economics was not a big fan of the Fed, and even described how to get rid of it.Joebob2k6 (talk) 10:52, 17 May 2008 (UTC)
Actually, I consider publications and books(not blogs or forums) from mises as reliable sources since they meet all of the criteria. If an editor has a problem with it, take it to the noticeboard. I remember that there was one reliable source from Keith Hart in the October 2007 edition of Anthropology Today where the video was briefly mentioned, but that does not make the video notable. --EGeek (talk) 05:21, 17 May 2008 (UTC)
How does one contribute to an article on "criticism of fractional reserve banking" when people hostile to such criticism have elevated themselves to judge the contributions? The people actively editing here have not demonstrated that they understand that well how the fed operates, or even official wikipedia policies. Why should they be the judge?Joebob2k6 (talk) 10:52, 17 May 2008 (UTC)
Again, keep in mind that this article is about fractional reserve banking criticisms, not Federal Reserve criticisms. If a reliability of source is questioned it can be brought up on the noticeboard. --EGeek (talk) 06:21, 19 May 2008 (UTC)
Yes, it is about fractional reserve banking criticisms. Why do you keep bringing up the Fed? I am talking about fractional reserve banking. Again, I ask when are you going to educate yourself on the topic you have chosen to camp-edit, fractional reserve banking? Joebob2k6 (talk) 05:56, 21 May 2008 (UTC)
Easy, big boy. EGeek is not a bully - he is genuine about this article and did positively contribute with some excellent amendments/additions in earlier iterations. Zenwhat is a bully, and in my respectful opinion is also completely unhinged. Gregalton is a British (Keynesian?) bully, but does it much more elegantly than Zenwhat, so he's kind of fun to deal with. EGeek only raised the issue of the Fed because of this comment from one of your earlier contributions: "The video is asserting that the fed is also loaning at fractional reserves." You've confused poor EGeek. I agree the video should be in, but EGeek is not the real enemy. The real enemy will come out of his dark little hole when you try to put the video back in the main article. Give it a go. See who deletes and that will be your answer.--Socppt13 (talk) 07:31, 21 May 2008 (UTC)
OK, Fair enough Socppt3. I am new to this page and do not know who is doing it, but I know that it is against stated wikipedia policy. I am speaking up because the page has problems, I am not editing because there is an edit war here. The archive of this page has a whole other set of posts (for some reason removed) that make it clear that its been going on a while. Anyway, this video should be included as well as any other decent videos, like money masters, because they are the best overview of CB criticism available and accessible to the average wikipedia user. Joebob2k6 (talk) 09:51, 22 May 2008 (UTC)
Agreed. This video and the excellent Money Masters video, and The Creature from Jekyll Island, and Antal E Fekete, and Stephen Zarlenga, and Ellen Hodgson Brown and Michael Rowbotham (who really hits hard) should all be added. They have all been deleted in some form in previous edit wars. I've been killed off so many times it's not funny. The only thing that's funny is that some editors think camp-editing and deleting this stuff over and over will somehow preserve frb's dwindling credibility - and given what's going on in credit markets today that really is hilarious. As I said before: Give it a go. Add the stuff you want back in. Edit away. You have as much right as any to edit the main article. You clearly know your stuff. Don't be afraid to edit - and fight for your edits. The worst that can happen is that Zenwhat will call you a nazi and terminate you. That's not the end of the world. Unfettered "fraudulent" frb is the end of the world (I think you know that), so enter the fray my friend. I am about to die so someone needs to keep the flame - and the Constitution - alive.--Socppt13 (talk) 11:41, 22 May 2008 (UTC)
It's slightly disturbing when "critics" and "editors" keep deleting all references to Money as Debt without having fully reviewed the material. I didn't see one reference to UFOs in the entire video. Perhaps if you watched it through to the end you may form a different, more balanced view? One slight, very technical error does not destroy the usefulness of the video to inform and teach, nor does it prove that the video is peddling conspiracy theory paranoia (I assume that is the intended implication in your use of the "UFO" smear?). I will respectfully leave out any reference to "Money as Debt" in deference to your views, but please try to be more respectful and less dismissive of this material, allowing others to make their own judgment. That scoundrel and rogue, Karmaisking, has been removed (fairly in my view) for his/her outrageously disrespectful conduct towards other honest, humble and good-hearted contributors, such as Gregalton and Zenwhat, who were just trying to improve the article and ensure the truth was accurately reflected in this article. Let's not repeat the error and let's try to remind ourselves of Gregalton's wise admonition to "try to be civil" at all times.--Lagrandebanquesucre (talk) 03:07, 9 April 2008 (UTC)
If we're going to be civil, let's not put "question quotes" when referring to others without some reason. I personally think EGeek is a "scholar and a gentleperson." ))
His main point is that the movie is not notable, and has some content that appears to be of questionable accuracy that would certainly make it non-encyclopedic. In other words, it's getting deleted from links because it's irrelevant to a serious article. And please refrain from linking to it further (like twice in para above) in talk pages unless there is some compelling reason - makes people like me who spend too much time removing conspiracy theory/promotional nonsense from WP unhappy.--Gregalton (talk) 12:15, 9 April 2008 (UTC)
I fully support your firm stance against that loser/reject/troll/sockpuppet/mockpuppet/conspirator, the uncouth "Barbarian" Karmaisking, Gregalton.
However, I must make the following very humble corrections to your post. First, I have no issue with EGeek being described as a "scholar and gentleman/gentleperson/gentle[insert pc expression here]." Why did you feel the need to make this redundant comment?
More importantly, some would find your unfounded (implicit) assertion that "Money as Debt" is "conspiracy theory/promotional nonsense" an unkind, ungenerous... nay, uncivil... smear on the video. You ask others to be civil. Please lead by example. Characterizing this video as "conspiracy theory/promotional nonsense" prejudices the ability of others to reach their own conclusions. I encourage others to view the video and form their own opinion, uncolored by anyone else's tainted characterizations - either "Barbarian" Karmaisking's biased, zealot-like support, or Gregalton's "civil" disdain.--Lagrandebanquesucre (talk) 06:21, 10 April 2008 (UTC)
I "question quoted" my comment on EGeek both as a compliment to him and to show that its use is unnecessary and (since ironic) not polite. In short, a joke, and not a very good one.
Fine, I have my opinion on this video, and it is not an implicit one but explicit. That does not prevent anyone from forming their own opinion, but may serve as a red flag that "this is not considered factual, reliable, or notable."
But we stray from the point of the talk page, which is about the article. Basta.--Gregalton (talk) 06:35, 10 April 2008 (UTC)
Oh, now I see "the joke". Very amusing.
There's no need to "red flag" an external link to protect people from themselves. I am confident that the public has the intelligence to understand the underlying issues coming out of the Money as Debt video. I agree that "Barbarian" Karmaisking's support of the gold standard is ridiculous primitive 19th century nonsense that should be condemned forever and ever to the cold dark "dustbin of history" (just like communism). Long reign unregulated fractional reserve banking/central banking forever and ever, I say. (Do I hear three cheers from Zenwhat?) It's lasted terrifically well so far. Long may "the system" of replicating "boomerang" fiat currencies flourish and procreate.
Oh, one final point: I felt it a sign of civil politeness to link Money as Debt in this post to the actual video rather than the "conspiracy theory/promotional nonsense" website, so others can easily judge for themselves the subject we are discussing. That should end the matter. Basta indeed.--Lagrandebanquesucre (talk) 11:38, 10 April 2008 (UTC)
Since central banking started in the 18th century, is it also primitive, outdated nonsense? Joebob2k6 (talk) 10:03, 15 May 2008 (UTC)
I actually saw the gold standard as a way for nations to develop their national and central banking systems during the 18th, 19th 20th centuries. Today, developing and emerging nations use major currencies (dollar, euro, etc.) in a similar way by pegging their national currency to one of these major currencies or a basket of currencies. I would bet a reliable source on this topic has been published somewhere. --EGeek (talk) 05:37, 16 May 2008 (UTC)
I should have mentioned this before: WP policy is no personal attacks. I see no reason to withhold this courtesy from banned editors, particularly as they are not around to respond.--Gregalton (talk) 05:34, 17 April 2008 (UTC)
Pardonnez-moi, Gregalton. I was referring to Karmaisking as a "Barbarian" in light-hearted memory of distinguished Cambridge Apostle and Bloomsbury "celebrity" John Maynard Keynes' famous derisory comment in relation to gold: "In truth, the gold standard is already a barbarous relic" (Monetary Reform (1924), p. 172). Not only was he a famous Cambridge Apostle and a classic British genius - he was also a prophet! What a man of courage and intellect! We miss his kind today, given the troubles we now face. Will the next Keynes-like Cambridge Apostle please stand up to save us all?--Lagrandebanquesucre (talk) 12:36, 19 April 2008 (UTC)

[edit] Vladimir Z. Nuri's academic research paper on Fractional-reserve banking as Economic Parasitism

I note that this research paper has repeatedly been added to the External Links and it has repeatedly been removed. I vote to keep it in. It is a somewhat "novel" analysis of monetary theory, the money supply, and fractional-reserve banking, but I see no reason to delete this important research paper given that (1) it is a heavily researched, academic published paper and (2) it is DIRECTLY relevant to the topic at hand. Could someone please review the paper and comment before I put it back in? I note that I make no judgment or comment on the intrinsic substance of the article itself. No one can comment on the intrinsic quality of the paper. The question is only whether it is a paper which addresses the topic at hand. Obviously, there have been heated discussions regarding the intrinsic quality of a number of references on this topic and the issue is one that seems to immediately generate a lot of heat. Editors have been banned, people have been called all sorts of ugly names. There's been some nasty nashing of teeth around here. So please, could commentators please refrain from disparaging (from their subjective view) the substance of any future references and confine their comments solely to whether the references are pertinent to the topic.

I believe this paper is pertinent to the topic at hand.

If no comments are forthcoming (or if the reasons for deletion are weak, such as "it's not notable", "I don't like what Nuri says", "I hate Nuri's guts and pray to God that he dies soon or at least has a bad accident" etc etc) I'll throw it back up in the next few days. Thanks.--Lagrandebanquesucre (talk) 02:41, 24 April 2008 (UTC)

I object and am deleting. Notability wp:n is one of the core principles, and hence by definition not a weak argument on wikipedia. I also question whether this paper has been published; RECEP is simply a site where economic papers can be put up, and does not indicate that it has been peer reviewed. It also does not meet the wp:el criteria.--Gregalton (talk) 09:25, 24 April 2008 (UTC)
Deleting based on notability wp:n is such a subjective nebulous amorphous grey corruptible concept, I wonder whether it should be used so strictly (brutally?) in an open-source website. This paper is "published" on-line. It is "notable" in the sense that it is an academic work dealing DIRECTLY with the topic at hand. I recognize that Nuri is not as well known as debt-loving economists such as Keynes or Friedman, but few monetary economists reach such heights of Superman or Nigella Lawson-type "celebrity" anyway. Could you please apply and justify this rule specifically in relation to this article. If the argument is that it's not notable because no one has heard of Nuri then Nuri will never be known and he will die without his work ever being seen. Surely Keynes was young once (before he ended up dead). How did he get "notable" other than someone like Gregalton leaving his paper lying around the desks of the Cambridge Apostles? This paper is notable to me because: (1) it's a heavily researched published paper that (2) goes into the topic at hand in some further detail. That is indisputable. That is why it should remain.--Lagrandebanquesucre (talk) 08:26, 25 April 2008 (UTC)
See WP:NOT. WP is not the place for him to become notable or become an economic celebrity; Keynes should not/would not have started here anyway. If you find notability amorphous, please feel free to bring it up on talk pages at wp:n. I believe this is essentially self-published (not peer-reviewed, as per wp:rs).--Gregalton (talk) 09:08, 25 April 2008 (UTC)
I take your point.--Lagrandebanquesucre (talk) 09:35, 25 April 2008 (UTC)
Just for the record, Gregalton, it wasn't me who put them back in. I've just been tidying up the first para of the article. I'd vote for Nuri, I'd vote out the comic. And I'd leave more See Also's, but then that's just me.--Lagrandebanquesucre (talk) 06:52, 29 April 2008 (UTC)

[edit] Should Antal E. Fekete be added as a "See Also" Link?

Antal E. Fekete is a powerful critic of the current monetary system. See his website. It contains numerous trenchant articles on the dysfunction (and eventual catastrophic implosion) of exponentially expanding irredeemable debt. The question is whether he is a critic of fractional-reserve banking, as applied in its current modern form.

Gregalton has deleted any reference to Antal E. Fekete based on this moderate, nuanced article defending the history of fractional-reserve banking, contesting the Austrian School's negative "conceived in sin and inherently deceptive and fraudulent and totalitarian" conception of fractional-reserve banking.

I present the following more recent articles, indicating a hardening of his line against the modern mutation of frb/central banking: here, here, here, here, here, here, here and here. Either there isn't an inconsistency (conceived in Heaven, descended into a modern-day Hell) or he has changed his mind. One or the other. Either way, he should be included as a "notable" external link. Any thoughts?--Lagrandebanquesucre (talk) 13:47, 28 April 2008 (UTC)

In the article I referenced, he primarily refers to gold standard as being the main issue, and fractional reserve banking as okay (if done right).
I also don't think EVERY critic of fractional reserve banking needs to be added here. In general, the see also sections tend to get bloated and can be cut down. Why Fekete in particular?
So here's a suggested compromise: if you can integrate his point of view into the text with a reference, he will be there and doesn't need to be linked to see also.--Gregalton (talk) 14:39, 28 April 2008 (UTC)
Agreed and done. By the way, I don't think every critic should be added either (there are a lot of crazy ones out there), only the ones who get the criticism right. Antal E. Fekete gets it so right it's scary.--Lagrandebanquesucre (talk) 23:49, 28 April 2008 (UTC)

[edit] Adding a few non-mainstream mentions

Gregalton, I am somewhat puzzled by your behaviour. First, you claim that this article is "fringe" and argued for its deletion. Now you have deleted several significant writers who are critics of the current monetary system and who (in my view) should be included on this page. You seem to be going around in a circle: This topic is not very notable because not many people are writing on it. When people who ARE writing on it are added to the article, they get deleted because the article shouldn't include a "list" of people who are writing about it. Why not leave in the names so people can do further research themselves to verify the claims? Surely that is the fairest approach. It's not as though adding these names expands the article by 500%. It's just one sentence - but that sentence then allows others to do substantial further research in tracking down these writers/critics. What is wrong with that?--Lagrandebanquesucre (talk) 01:01, 30 April 2008 (UTC)

See my comment above - lists and see alsos are not particularly helpful in the context of an encyclopedic article. If you want to include every tom, dick and harry who has said something about this, ref with coherent references in reliable sources. In other words, improve the article rather than just list/namespamming. If they have nothing coherent to say, leave them out.--Gregalton (talk) 05:31, 30 April 2008 (UTC)
"Not helpful"...to whom? They are certainly helpful to those who want to do further research or who wish to verify some of the statements made in the article. They (obviously) would not be helpful to those who don't have an interest in reading about the subject. But then, they wouldn't be on this page, would they? Regardless, I have abided by your taste in encyclopedic writing style, however subjective that assessment may be, because (1) you appear to be able to block people and (2) I am not a barbarian who wishes to fight with anyone.--Lagrandebanquesucre (talk) 06:34, 30 April 2008 (UTC)
See the various manual of style docs, wp:not, wp:el, etc. Not helpful in the sense of doesn't read or look like an article, just a collection of links - covered in wp:not.--Gregalton (talk) 10:31, 30 April 2008 (UTC)
Looking at your recent additions, in every single case that I can see, you've added no content to the article, just links to the same existing text where no support is needed. This is just linkspamming and I'm reverting.--Gregalton (talk) 10:35, 30 April 2008 (UTC)

[edit] Clean up of Cites in Conventional Analysis

I note that the footnotes to this section contain many superfluous, redundant []s and are basically a mess. It looks like someone vomited out the footnotes. Can someone take the time to clean this up? Perhaps Gregalton? I also note that the substance of the section is dense, circular and not elegantly written. Can someone give this another go please? It urgently needs a clean-up.--Lagrandebanquesucre (talk) 01:01, 1 May 2008 (UTC)

This request has stayed here for some time and no one made any attempt to clean this up. I have done so. CEA now looks much neater, with the substance still there, but the irrelevant guff removed. I would be amazed if anyone (Gregalton included) wanted to put the trivial, irrelevant stuff back in. Everyone appears to agree that long-winded rubbish should be cut down. I could not agree more - especially in CEA.--Lagrandebanquesucre (talk) 01:15, 6 May 2008 (UTC)
I'll take a look, and thanks. Please note, however, that much of what may be considered "irrelevant" cites were inserted in response to requests for citations.--Gregalton (talk) 04:52, 6 May 2008 (UTC)
This was not a "clean-up" but a wholesale removal of well-refed content. If you have specific issues, please take it bit by bit.--Gregalton (talk) 05:00, 6 May 2008 (UTC)

Gregalton let's be reasonable. CEA is, at best, peripheral (at worst completely irrelevant) to the topic. Other editors complained and then got (understandably) cheesed off and left. Your myopic determination is the only thing that has left the article in this bizarre twisted state (defense of CEA first, deleted sections on DBMS last, confusion everywhere, nothing clearly stated in CEA...a mess). The sentences are refed, but so what. Superman is well refed but is IRRELEVANT to the article so is not included here. I have not deleted the whole section (although arguably it is irrelevant, but in the interests of balance it can stay). However most of it was dense irrelevant material that amounted to a long-winded "defense" of the current monetary system and mainstream economics more broadly - which can be found in greater detail (with much better writing style) elsewhere on WP. What remains is the nub of your long-winded comments. It's fine. Merely because you wrote it and refed it doesn't make it readable, relevant or even sane. Gregalton, get some perspective. Please.--Lagrandebanquesucre (talk) 05:19, 6 May 2008 (UTC)

For perspective, please see wp:undue; since the conventional is the standard interpretation, it should be prominent. I've stated from the beginning that this article should never have existed, since it was mostly an attempt to promote a mishmash of fringe theories. At least some of the support for maintaining it came from sockpuppets. Well, so be it, it exists, but removing good refs is not constructive.--Gregalton (talk) 05:39, 6 May 2008 (UTC)
Your CEA is prominent. It's still there. It's just not as long-winded/turgid. What you're saying is "FRB isn't a problem in mainstream economics and this stuff is either trivial, already dealt with within the mainstream or rubbish fringe cranksterism". That's all you're really saying (and I've said it in one sentence!). Why say it so badly? Especially when you've criticized others for being long-winded and cut this article down around 90%? I'm going to do one last revert. Is there anyone else out there with an opinion, because Gregalton is very proud of his own writing and like his refs. But hates everyone else.--Lagrandebanquesucre (talk) 06:18, 6 May 2008 (UTC)
Please don't revert. Your comments above are not constructive either. The refs are strong and you may not like the writing but you have removed important components directly related to the subject, such as the distinction between different types of money (which most of the fringe stuff ignores).
Define "strong". In the context of this article. Why not add the whole corpus of Keynesian economics, monetarism, neo-classical economics and mainstream economics in CEA just for good measure. The refs are "good" in the sense that they appear to have relevance to the sentences, but the sentences are irrelevant to the article. I genuinely have to question your perspective Gregalton. As stated above, what you're saying can in fact be said in one short sentence. To drag out CEA as you are doing confuses the non-academic public and makes this more complex and turgid than it needs to be. Elegant writing is a virtue. Writing irrelevant dense rubbish is a sin.--Lagrandebanquesucre (talk) 06:27, 6 May 2008 (UTC)
Thanks once again for your constructive comments. As for "irrelevant dense rubbish", please see your contributions to the section above in "Please I don't want to fight you."
Now that you've gotten that off your chest, please look at your edits again: I repeat, you have removed distinctions important to the concept (different types of money) and refs that were reqested by other editors.
You may also wish to review wp:wikiquette. Your claims that I "hate everyone else" and other borderline personal attacks are not contributing anything.--Gregalton (talk) 06:43, 6 May 2008 (UTC)
I agree - my writing in that section is very similar to your writing style. I was trying to "get into the groove" - if you know what I mean. And I'm sorry I accused you of "hating everyone else". That's incorrect. I admit it appears you like Zenwhat. Zenwhat certainly loves you.--Lagrandebanquesucre (talk) 02:42, 7 May 2008 (UTC)
As for your substantive comments, I beg to differ. The stuff deleted is peripheral or tangential or irrelevant to the topic. If you wish to "improve" mainstream economics or Keynesian economics or neoclassical economics, please feel free. As someone with (apparently) little background or interest in monetary reform perhaps you should be more deferential to others who have read more about the topic. I suggest the current version is perfectly acceptable, gives readers scope to further investigate the wonderful world of mainstream economics - and doesn't weigh this article down with lead.--Lagrandebanquesucre (talk) 02:49, 7 May 2008 (UTC)
Oh...one last point...can somebody (a disciple of neo-Keynesian economics perhaps?) find a "reputable" cite for this: "Others argue that there is in fact no mathematical necessity for the money supply in a debt-based system to grow, since the interest portion of loan payments is not taken out of circulation, but goes into the lender’s account, where it can be spent back into circulation and eventually be used to pay off some loan principal. The exponential growth of debt need not give any concern because if GDP growth is positive GDP is also growing exponentially and the ratio of debt to GDP might change in any direction." If no one can find a cite, I will remove it.--Lagrandebanquesucre (talk) 03:44, 8 May 2008 (UTC)
The quote is disingenuous. While both GDP and debt are governed by the exponential, they have different time constants. The time constant defined by customary interest rates is far faster than GDP growth, which is tethered to population growth and incremental improvements in efficiency. The divergence of the curves is in one direction, and will eventually overwhelm the timescales of participants (your paycheck will be devalued noticeably before the deposit settles). Joebob2k6 (talk) 10:18, 15 May 2008 (UTC)
It is not tangential or irrelevant, and removing cited material is poor wikiquette, and seemingly at conflict with your request to improve citations. Your removal of POV when the sections are not neutral is also not constructive. I'll be reverting again. I'd once again request you consider not deleting well-sourced material again, nor removing flags that have been placed with cause. And cease and desist with insults and attacks, such as "Barbarism."--Gregalton (talk) 07:10, 8 May 2008 (UTC)

[edit] "Government-issued fiat currency can be issued debt-free" - Dubious/Discuss

OK. Discuss what? It's been tried before. I'd be amazed if this is refuted. Fiat currency issued by the treasury is inherently debt-free in the sense that it's not a claim that needs repayment. If the Mint hasn't been killed off, citizens could still redeem in gold or silver, but the note doesn't represent a bank debt - and therefore, crucially, interest doesn't need to be paid on its issuance. What's "dubious" about the sentence Gregalton?--Lagrandebanquesucre (talk) 06:22, 3 May 2008 (UTC)

Can you find a reliable source? The sentence is 1) irrelevant, because it is about fiat currency, not fractional reserve banking, and b) meaningless - if it's not a claim that needs repayment, it's hard to say it's a claim. The main point is, these arguments keep confusing currency regime and banking regime. They are not the same issue.--Gregalton (talk) 13:56, 3 May 2008 (UTC)
There's no "confusion" (see "I don't want to fight you" above). I don't know whether you'd call The Lost Science of Money a "reliable" source, but it certainly can be used as a basis for the claim. If you agree please include it as a cite.--Lagrandebanquesucre (talk) 04:30, 4 May 2008 (UTC)

[edit] Strange Bizarre Edit War Suddenly Appears

I have no idea what triggered this, but after weeks of a stable, relatively clean article sitting here, Gregalton has taken it upon himself to go back in history and pick his preferred version. Which has many defects, which have been highlighted and discussed above. I note that the whole article is POV tagged. Has been for months. This has NEVER been removed by any editor after it was flagged. Certainly not by me. Are you proposing to put POV on every sentence, just in case the reader needed to be "red flagged" on every "offensive" sentence? The WHOLE ARTICLE is POV flagged ALREADY, for Pete's sake! What more do you want? And the CEA section has been comprehensively dealt with above, with no support for the long-winded stuff being left in other than weak points about the stuff being refed (so what?) from its rather precious author (which hardly constitutes an objective assessment). CEA is dealt with in mainstream economics more than adequately and that constitutes a SEPARATE article, having virtually nothing to do with DBMS. I'm going to revert unless a reasonable, reasoned analysis comes from somebody (anybody).--Lagrandebanquesucre (talk) 07:19, 8 May 2008 (UTC)

Your representation of the history is nonsense. I reverted to a version not from weeks ago, but from only several days ago, when you decided to remove large chunks.
The "edit war" is a result of only one thing, your removal of well-cited material. And I have POV flagged two sections, not every sentence, with specific reasoning explained in each case: they are not written neutrally.
And please stop with the annoying sobriquets such as "precious." That is, if I'm counting correctly, at least the second attack comment you've made today with "barbarism."--Gregalton (talk) 08:45, 8 May 2008 (UTC)
I may have had the dates wrong regarding the old version you want to use (if I do I apologize), but it appears clear the reversion was from many edits ago (it also involved an edit of the first para as well as the CEA section). I will keep this reasonable and objective. I hope you will see the sincerity of my point of view and accept the reasonableness of my position.
First, you appear to have taken the barbarian comment completely out of context. I was saying Karma was a barbarian (given his support of the gold standard) and don't want any barbarism to reappear anywhere. I never accused you of barbarism. However, based on your comment, I do suspect you take things out of context (for further evidence of this, see below).
Second, you clearly appear to have supported Zenwhat in an earlier section of this very talk page when he made the following comment (and I quote): "It would be better for the article on Holocaust denial or 9/11 conspiracy theories to be stubs than to be filled with patent nonsense. I don't care how many citations Karma made. It takes more than one side to engage in an edit war."
"I don't care who many citations Karma made." Don't. Care. How. Many. Citations.
I support the spirit of Zenwhat's strong condemnation. He appears to be making the point that if the stuff that is written is irrelevant or rubbish it should be deleted, REGARDLESS of the level of citation or referencing. That is a reasonable point. It is one you appear to have been behind Zenwhat on. One that you fully supported at the time.
Now, applying the test to the CEA section: What is the nub of this article about? It is attempting to explain the use of the term "debt-based monetary system". Primarily, that is what the article is about. In what context is the term used? Well, I can find it used in the following contexts: here, here, here, here, here, here, here, here, here and here. All these comments are in the context of criticizing the current orthodoxy and criticizing the system that creates money primarily through the combined use of fiat and private frb.
Again, this has NOTHING to do with the intelligence, accuracy or otherwise of these views. The references I have listed clearly establish the context within which the term is used. Now, you argue that CEA is justified because the use of DBMS to describe the current monetary system is "fringe". Again, fair enough, I have no problem with that. But then to argue that the old CEA section should stay (dense references on mainstream economics, on and on about orthodox economic theory) is unbalanced IN THE CONTEXT OF THIS ARTICLE, and, arguably, completely irrelevant. I am not saying that it doesn't deserve to be in here at all. I am trying to be reasonable here. The smaller version of CEA nicely summarizes the current orthodoxy, guides readers to better-written articles on mainstream economics and alerts them to the fact that the use of DBMS is fringe. That's all that needs to be said IN THE CONTEXT OF THIS ARTICLE.
To use a pathetic analogy (at least it gets the point across), the article on anal sex does not need a long, detailed section on the Catholic Church's condemnation of buggery. That would be unbalanced in the context of the article. Perhaps a comment that some religions condemn anal sex would be sufficient to warn people it's something you may not want to try in front of your local Bishop. But to have the Catholic Church's position dominate the article (however well referenced) would seem bizarre, unbalanced and unnecessary, if a reference to religious condemnation of the practice is needed at all (which it probably isn't).
I trust I have made my point perfectly, crystal, clear.--Lagrandebanquesucre (talk) 13:01, 8 May 2008 (UTC)

[edit] Editwars with sockpuppets

User:Lagrandebanquesucre is a confirmed sockpuppet of User:Karmaisking. Just can't stay away. Particularly offensive given consistent escalating personal attacks and diversionary tactic of attacking himself (see above). Should have pointed out core policy sooner. Certainly there will be less patience with other obsessives next time 'round.--Gregalton (talk) 18:56, 8 May 2008 (UTC)

[edit] Condemned Socppt11's dying wish

My last, final, dying, wish: A considered response to the substantive issues raised. Even a sockpuppet condemned to death deserves at least that. Please.--Socppt11 (talk) 03:17, 10 May 2008 (UTC)

Nope, you don't actually.--Gregalton (talk) 03:43, 10 May 2008 (UTC)

[edit] There are some serious problems with how this article is being handled

Asides from the obvious conflict coming from people who are apparently either for or against fractional reserve banking, there are problems with this article, especially with regard to pejorative terms. 'Full reserve banking is considered "hypothetical"', similar to calling evolution merely a theory, it sets off a bad precedent for the rest of the article.

"Differences in terminology (debt money, for example) do not represent, from the "mainstream" perspective, new analysis, and the more extreme conclusions about the "inevitable" negative impacts of so-called debt-based money and "fraud" perpetrated by banking circles upon the public are considered akin to conspiracy theories. The subject of debt-based money (as distinct from traditional monetary policy) is absent from reputable academic economic publications, and is largely relegated to fringe status."

In this paragraph, anything questioning the prevailing orthodoxy is referred to as not "mainstream" (what are the quotes doing there?), is linked with some sort of economic extremism, "so-called" debt based money, and the coupe-de-grace, relegating anything but the most prevailing analysis of the outcomes of this policy as "akin to conspiracy theories". While it may be absent from the abovementioned reputable economic publications, to require someone to search the entirety of every article ever published by unnamed publications is a little excessive, so I did a google search instead. It turned up a number of news articles, two actual economic papers (though I'm not sure if they're peer reviewed) and one book on amazon, within the first two pages.

Censoring something because you don't support it is anathema to what Wikipedia is supposed to stand for. Deciding to delete things because they may not be factually accurate is obvious premption of opposing points of view. The day every single article, peer reviewed or otherwise, is utterly factually accurate is a day when policies like NPOV will be unneeded, but until then, I can't see how it's justifiable to exclude things that differ from what you want to hear, simply because there is an "extreme conclusion" or god forbid, a minor mathematical mistake. But I know this section on the talk page is just going to be deleted anyways, and whoever has the vested interest can go back to pretending that everyone loves fractional reserve banking. —Preceding unsigned comment added by 68.144.81.206 (talk) 17:50, 11 May 2008 (UTC)