@ Lateralus - Fractional reserve banking. Your earlier post covered quite a bit of ground,
and I won't claim to have the answer to everything economic, but just for the laughs, lets
suppose we are fractional reserve bankers. I'm the Bank of England and I have £1 in gold,
and that means I can lend you £10. You are the Federal Reserve Bank, so if we have £:$
parity, you can lend me $100. With that as a reserve .... you can see where this is going.
:-)
To have fractional reserve banking, you need to be working on a Gold Standard, or a near
equivalent. That's not how todays banks work. So what constrains bank lending?
Risk. More precisely, Perceived Risk. Which is why I wrote up the thread
"Unlimited Banking and Problem Banking" which got too long, but you may want to skim
through it.
I'm trying to put together something on Banning Usury, but for the moment that solution
looks worse than the problem that needs fixed, so no rush to finish there.
You cannot successfully top-down ban usury. The only was to eliminate it is to get people to voluntarily refuse to participate both as borrower or lender despite the fact that doing so is potentially profitable.
That's probably not going to happen in our lifetimes and it is not even possible without an alternative currency that can be used for day to day transactions one that does not have usury at its core.
This is where BTC comes in and is one of the reasons I am interested in it.