Ah, I finally see where our disagreement lies! Call me slow!
It is fraud to place two property claims on the same BTC. To say that the depositor owns a physical BTC at the same time as a lendee owns that same BTC, while telling the depositor that the BTC is solely and wholly his and can be withdrawn, spent, or transferred at any time, is fraud.
It is NOT fraud to give the depositor a paper which represents future BTCs and tell him that he no longer owns any physical BTCs, because he gave them up in return for the paper. It is furthermore not fraud to then lend these BTCs out, since they no longer belong to the depositor but they belong to the bank. This is otherwise known as the depositor purchasing a certificate of deposit or bond with the bank.
I agree with your statements above! Woot!
But I'm making the claim that your checking, savings and CD accounts are the SECOND situation not the first. When you sign up for a bank account you sign a contract with the bank. It is a transaction just like any other. You SELL them your money, and you BUY their "paper" that promises that they will perform as stipulated. If the stipulation is "on-demand withdrawal" that means if they don't give you some of THEIR BTC when you demand it, they are in default on the contract and you can sue them.
I claim that, in no way, is the BTC you give the bank still yours after you make a deposit. The abstract "account" specified in the contract is yours and the contract binds the two of you to certain behaviors.
However, the bank does sell other services that match your FIRST situation. They call them "safe-deposit" boxes. You rent them from the bank fill them with YOUR property and the bank itself never has claim on your property.
OK, so we agree on the following. That was what I was saying in my previous post.
Bank receives 100 BTCs from A. Bank credits A with 100 BTCs at its bank which can be withdrawn, spent, or transferred at any time.
Bank lends 90 BTCs out to other people as loans.
A withdraws his 100 BTCs <-- They no longer exist.
It cannot do this unless it sells the 90BTC of loans to another party in return for real BTCs which it can then use to back its deposits. It cannot back its deposits with paper, because the depositor does not want paper, he wants BTCs. That's what he agreed to and that's what the bank promised.
Furthermore in the previous post, I claim, if you can do this efficiently you can quickly convert "loan properties" to BTC by quickly selling them to investors on-demand. (in this case investor money means hoarded BTC)
Yes, the bank can now borrow BTCs from another bank in order to pay out the depositor, but a banking system cannot do so in aggregate. Loans need to be backed by savings.
So loans don't need to be "backed by savings" in the sense that there is BTC in a hoarded address. I needs to be backed by an asset liquid enough to be converted back to BTC on-demand. (gold would probably qualify)