Replying to dfa94a58...

There will always be credit/debt. It will arise spontaneously, not least in the manufacturing cycle, when goods are ordered but only paid for on completion of being manufactured. In the meantime costs and salaries must be paid. Credit notes arise and circulate as money to facilitate this. These notes used to be called Real Bills. They are settled for bitcoin or gold upon payment for the goods manufactured. The problem comes when the debt issued becomes unmoored from the settlement amount. Like in fractional reserve banking. I don't know how you solve this problem. I don't think you can.
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Judge Hardcase 1y ago

I think it's an issue of duration match. If a bank takes in deposits and issues loans resulting in a fraction of its liabilities left in reserve, this becomes a problem when depositors are free to withdrawal prior to a comparable repayment of the loans. As such, a responsible fractional reserve bank would put appropriate time requirements on the deposits they take in (such as with CDs). Does this prevent all banks from being irresponsible? No. But, it seems to me that problem solves itself when the irresponsible banks fail, and there is no money printer to bail them out.

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dfa94a58... 1y ago

You are 100% correct. Duration matching is one problem, but excess loans without any matching is the problem and bank failure , or the implied threat of failure by a bank run , is the solution IMO. No regulation, because that becomes regulatory capture, just caveat emptor. Learn the hard way!