On March 26, 2020, the United States central bank reduced reserve requirements for US banks to 0 percent from 10 percent in reaction to the economic effects of the covid pandemic.
The bank must keep a certain amount of gold in its vaults since depositors on occasion will exchange tickets for gold.
Another constraint is that depositors, if they get suspicious that there are more claims than available gold, may run to the bank demanding to redeem their "On demand" claims into gold.
The standard response from the average Joe is that "Everyone knows that the bank loans out your money." Or they will say that "All banks in the US include a clause in the depositor's contract that specifically says that the relationship between the depositor and the bank is exclusively one of creditor and debtor." Suppose the bank takes your money and loses it all.
If the bank had told you that the money is unfortunately lost, there would be no fraud.
The fraud occurs the minute the bank takes someone else's money.
We need to start a serious discussion about ending fractional reserve banking, and central banking at the same time.
https://mises.org/mises-wire/fraud-inherent-fractional-reserve-banking
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