Yes, I understand how fractional reserve banking works. I understand that many bitcoiners agree with Murray Rothbard that FRB is a fraud. I also understand that 5000 people are going to try and explain this to me and get on their moral high horse now to shared their received wisdom with me.

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Anyway, this same problem could happen with 1-to-1 reserves if some part of the reserve is not liquid or immediately accessible.

Correct.