Comments by "Wojtek The Bear" (@wojtekthebear4958) on "The History of Paper Money - Not Just Noodles - Extra History - Part 2" video.

  1. Backing up an assertion with another assertion does not somehow support the original assertion. Also your supporter is an Austrian economist, one of the most heterodox schools of economics that is in no way supported by economic theory. I mean he's calling the gold standard sound money when, in fact, it's been proven several times over by economists like Milton Friedman, Irwin, and Eichengreen that the gold standard lead to the Great Depression. Sources include Friedman's Free to Choose documentary (https://www.youtube.com/watch?v=MvBCDS-y8vc), Eichengreen's paper on the matter (http://isites.harvard.edu/fs/docs/icb.topic467999.files/October%2022%20and%2027%20-%20Trade%20Money%20and%20Finance/Eichengreen.pdf), Irwin's paper on a subject relating to the Great Depression (http://www.nber.org/papers/w16350), Bernanke's paper on the matter (https://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm), and the freaking GDP per capita data collected during the Depression (https://upload.wikimedia.org/wikipedia/commons/b/b5/Graph_charting_income_per_capita_throughout_the_Great_Depression.svg). Hell, of the 50 or so economists polled here (http://www.igmchicago.org/surveys/gold-standard), 100% of them said that our currency would be no more stable nor our employment better, if we switched over to a gold standard. FYI: This is a beautiful quote from an economics professor at MIT after answering he survey, "All insights from the past and current crises go against a gold standard.". But no, a gold standard would TOTALLY work. What do economists know, right? They've only been studying this, eh, most of their life?
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  2. Actually people not understanding it and treating it as some big conspiracy are the real scourge.
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  3. It was dangerous for pilgrims to carry their entire wealth on their pilgrimage to Jerusalem, so instead the Knights Templar created these institutions where you could deposit your money in one location (like France), they give you some way of identifying your deposit (like a check), which you could then use to withdraw the money from their institution in Jerusalem.
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  4. Except it still 100% is. First, fractional reserve banking is the only reasons banks are profitable in the first place. If a bank was required to hold 100% of someone's reserve and couldn't reinvest it, they'd make no profit, meaning they have no purpose for even existing (businesses need to at least break even, which a bank can't do without profit). Furthermore, it would heavily restrict our monetary supply as money would effectively disappear from the economy. Sure, eventually the central bank might be able to bring the amount of currency around to a similar level of before, but that instability would have a long term impact on the economy as people would no longer trust the value of the dollar as they had previously. If the price of milk suddenly skyrocketed to $50, even if only for a day, you'd be a little wary of it's price in the resulting weeks. Finally, the underlying problem you laid out of fractional reserve banking, that being a bank run, has mostly been solved. Thanks to the FDIC and similar institutions in other countries, people aren't worried about banks not having enough money to cover their withdrawals as they are insured up to $150,000 (or whatever the amount it) anyway. As people aren't worried, bank runs don't happen. This is evident in the Financial Crisis when, even though there was huge instability in the economy, and especially the banking sector, there was no news of an actual bank run in the United States.
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  5. Well it's not and a fundamental part of our economic system....
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  6. Same as you, but at least I have economists backing up my assertion (https://www.frbatlanta.org/education/classroom-economist/fractional-reserve-banking/economists-perspective-transcript) and (http://www.investopedia.com/terms/f/fractionalreservebanking.asp).
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