Every once in a while, a news article allows a glimmer of light to shine through. One such story a few days ago (sorry, I don’t have the url) discussed the Vollgeld Initiative in Switzerland. The initiative would eliminate fractional reserve banking. Fractional reserve banking is the policy that allows banks to ‘create’ money, by allowing them to loan out several dollars for each dollar of reserve (i.e. savings) they hold.
Fractional reserve banking is, thus, a major part of the impetus behind inflation. (Inflation is the expansion of the money supply, which causes evils such as the dilution of the purchasing power of each dollar and the initiation of the business cycle of ‘booms and bursts’ that has caused so much havoc during the last century.)
The news’ nickname for this was called the Sovereign Money initiative, so obviously – although it didn’t give specifics that I saw – the state would still exercise control over the money supply. While the state controls the money, evils such as inflation would only be mitigated, at best. But it seems like a step in the right direction.
I mention and discuss briefly the moral reasons for an end to fractional reserve banking, as well as to state control of a country’s financial system, in my book Walk In It, (still available from Amazon.) Every once in a while, ideas that are right philosophically and morally are proposed politically. When it happens, such ideas deserve our consideration and support.
Askance Eye Miniblog 