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I think the main difference would be that people would understand that loaning your money to a bank carries a certain amount of risk vs. the alternative of self custody. That has been completely ignored in our modern society and it's just the standard to leave all your cash in the custody of a bank. Lending money means risk. Period.

Mike Brock 2y ago

This is a completely anodyne point. I don’t know anybody of average intelligence that doesn’t understand that there is some form of risk in the banking system connected to how banks make loans or invest in assets. You don’t think the people who lived through the 2008 Financial Crisis understand that?

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Discussion

Chilidem 2y ago

You clearly don't. Because you're arguing that everyone should get bailed out. So you're entirely erasing the risk.

Mike Brock 2y ago

I am arguing for the FDIC to address an irrational market psychology before it turns into systemic risk, yes. And I don’t think it would cost taxpayers or anyone a dime to stop it. Because FRB *has* enough assets to cover liabilities. The issue is going to be a duration/maturity mis-match. I am really bored of the conversation about the immorality of that system, though. I get it. And I don’t need anyone to recommend the “Mystery of Banking” by Murray Rothbard to me to get people’s point. Not that you are. But I’m sure someone will. Which I’ve already read.

DarkMe 2y ago

I wouldn't be so sure! At least that's not the perception I have from the majority of people!

Mike Brock 2y ago

You’ve conducted a survey and found a majority of people think banks have “zero risk”?

DarkMe 2y ago

I either live in a shitty, socialist, statist part of the world, where people are dumbed down by the government and the "specialists" (which I do), or you are a bit detached of the reality outside the US!