Wallingford, CT & Eastern Shore, VA
Originally Posted by Jamesiv1
You would have two basic accounts. One where you could withdraw funds immediately, for writing checks or whatever, but which would pay no interest. That would be 100% reserves - no risk of loss. And the other would be fractional reserve and would pay you interest for the use of your savings. They would lend the money out and you would be paid interest as the loans are repaid; the banks would keep a percentage. That would also come with the risk of loss and time restrictions on withdrawals. There would be no FDIC, Federal Reserve, or bank bailouts.
Originally Posted by The Gold Standard
Under the current system, with FDIC insurance and bailouts, there is no risk of loss to the nominal amount in your personal bank account, but you still pay for the risk at a system wide level through devaluation of your savings. In a Ron Paul world you would have control over the amount of risk you would like to take while under the current system you are forced to take risk on behalf of the bankers and debtors.
Last edited by enoch150; 02-26-2012 at 06:18 PM.
"Government is not the solution to our problem; government is the problem."
Ronald Reagan, 1981