One element in the current worldwide financial crisis is the occurance of
runs on the banks: people want to get their money in cash, and fast, and this brings every bank to the edge of bankrupcy and compromises the remaining banks!
No bank can cope with these withdrawals as banks don't back every money unit in accounts with the same amoung of cash:
the last months several national governments have had to guarantee bank funds by instructing central banks to turn on the printing press, causing
even more loss of purchasing power, while socialist media were proclaiming the downfall of Capitalism.
The problem however, lies not in Capitalism, but in the scandalous behaviour of banks, and the solution would be for banks to return to the system
of full reserve banking, so that a bank run doesn't happen again.
A practice which has proved itself as harmful as banking without the responsibility of the bank for the money it created should not complain
if support by the government is withdrawn.
Patrick Rosenhøj
http://www.mises.org/books/desoto.pdf
1 opmerking:
One element in the current worldwide financial crisis is the occurance [spelling: 'occurrence] of
runs on the banks: people want to get their money in cash, and fast, and this brings every bank to the edge of bankrupcy [spelling: 'bankruptcy'] and compromises the remaining banks!
No bank can cope with these withdrawals as banks don't back every money unit in accounts with the same amoung [amount] of cash:
the last months several national governments have had to guarantee bank funds by instructing central banks to turn on the printing press, causing
even more loss of purchasing power, while socialist media were proclaiming the downfall of Capitalism.
The problem [comma] however, lies not in Capitalism, but in the scandalous behaviour of banks, and the solution would be for banks to return to the system
of full reserve banking, so that a bank run doesn't happen again.
A practice which has proved itself as harmful as banking without the responsibility of the bank for the money it created should not complain
if support by the government is withdrawn [flow in final sentence not OK].
Make sure you do not create sentences that are too long!
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