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81 sats \ 4 replies \ @Scoresby 9 May \ parent \ on: New Interest Free Biblical Loan on Lendasat! Christianity

If you just lend it to me without any security, I'd say it is an unsecured loan and there is no reserve at all.

When people say fractional reserve don't they mean that a bank or something loans out more money than they have on deposit?

Here's something I often think about (but struggle to understand):

And as Rothbard himself points out, lending is indistinct from investing:
Whether saved capital is channeled into investments via stocks or via loans is unimportant. The only difference is in the legal technicalities. Indeed, even the legal difference between the creditor and the owner is a negligible one.
All lending originates from a person's accumulated capital, whether deposited in bank or otherwise. There is no source for lending other than savings deposited.

This is from Voskuil's Full Reserve Fallacy

The way I currently understand it is that in order to land something out, you must risk that you will not get it back. Otherwise you haven't actually lent it out.

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113 sats \ 2 replies \ @Lux 9 May

The term fractional reserve originates from the banks obligation to keep a percentage (fraction) of reserves compared to loans issued. That obligation no longer exists.

This means that for any amount deposited in the bank, it can lend any amount greater than that deposit.

This is only possible in a fiat currency scheme where there's no money, only currency (debt) issued by the author.

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113 sats \ 1 reply \ @BlokchainB OP 9 May
Finally, it is often the case that people advocating for full reserve lending are the same people advocating for lower time preferences. This is a direct contradiction, as the former implies infinite time preference.

I am having a hard time understanding this

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96 sats \ 0 replies \ @Scoresby 10 May

I have a hard time understanding most of Voskuil's stuff. I find the exercise of thinking about it is usually fruitful (unclear whether the credit belongs to Voskuil or not).

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113 sats \ 0 replies \ @BlokchainB OP 9 May

Then why does collateral exist?

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