People can't directly submit txns because they are too expensive due to limited space. So coin used for spending must be held by larger institutions who handle payments internally, and periodically make blockchain transfers among themselves. These institutions will inevitably go fractional reserve even though they claim they won't.
Nonsense.
Care to elaborate on that? Those who cannot afford to transact on the
[BITCOIN] blockchain, what will they use instead?
-"sane and non-inflationary financial instutions whose sanity and honesty are ensured by the holy blockchain"