“We all know what notes and coins are. They allow us to exchange the fruits of our work for the goods of others. When we deposit cash in Bank A – say £100 – we lend this money to the bank. But as soon as you make a deposit it becomes the bank’s. They then lend the £100 to say an entrepreneur, who banks it in bank B. Like magic, we now have you, who have a claim to “your” £100, and the entrepreneur, who also has an equally valid claim to “his” £100.” Read more.
“The Radical Banking Reform that Would End the Boom and Bust in Banking”
Toby Baxendale
The Telegraph.co.uk, September 15, 2010.
H/T to Pete Boettke at Coordination Problem.
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