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Here is one of the ways we get one of man's best friends:  

 

 

I scavenge copper out of radios, discarded tv sets, old copper wires and pipes, etc.  

I love silver, too.  But copper is more accessible, not so bloody expensive.  I have two one ounce coins I carry around and rub together just because it feels good.  One is a d'Anconia Copper bullion round, the other is a silver bullion round with Ol' Hickory and his famous, "By Eternal God, I will route you out!" etched onto it.  

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Unabashed,

We both have the bicycle sickness,  and now this, too?!

I have retained every pre '82  penny and every nickel I received in change over the past twenty years.

As you know every pre '82 (and some '82) penny is 95% copper (and 5% zinc, making them technically a brass, "gilding metal") and currently worth about 2 cents in copper at that metal's current value of about $3/pound.

And nickels are 75% copper and 25% nickel and have been worth about 8 cents but are currently worth only about 4 cents (just over 2 cents copper and just under 2 cents nickel.)

I buy brass like it is food. I like nice deep red high copper brass, and high zinc yellow, too. Any decent sculpture, ships' bells, any bell too large to hold (that hangs,) spent gun and artillery shells worked into vases and objects of art.

- - - Now that I got researching all this stuff to get my figures right, I discovered something I never knew about: World War II artillery shells were melted down throughout '44, '45 and '46 and made into the pennies minted those years. I knew about the '43 being steel, I even have a few uncirculated ones, but never knew about the artillery shell pennies which I am sure I have many of and will now have to go find and hold.

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Knowing about the anti-microbial aspect of copper, when I wear my Abe Lincoln presidential dollar coin ring (77% copper outside and pure copper inside that gets exposed when the center is punched out,) I periodically take it off and put every finger into it, roll it around in the palms a few minutes and put it back on. Those $1 Presidentials make nice copper rings because they don't green your finger because the surface in contact with your finger was the surface of the coin which is a low-tarnish alloy (77% copper, 12% zinc, 7% manganese, 4% nickel.) They punch out the center of the coin then force the coin into a series of dies that invert it 90 degrees until the heads (obverse) side is in contact with the finger and the tails (reverse) side is facing out. You can see "United States of America," both of Lady Liberty's hands and the dollar sign under the "D" in "United." When I take it off you can see the obverse of the coin that goes against skin and it says "Abraham Lincoln 16th President 1861-1865 In God We Trust." One edge of the ring is pure copper exposed when the coin's center was punched out and the other edge of the ring says "2010 D  E Pluribus Unum." You can get the series of dies online to punch the hole and force the 90 degree inversion, all you need is a hydraulic press.

See the source image

This one isn't mine, it is a George Washington, but otherwise same thing. The edge we see none of, facing away from us, is pure copper.

US Presidential Dollar Coin Ring image 0

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12 hours ago, Brant Gaede said:

Bacteria also have a hard time surviving on raw wood cutting boards.

--Brant

I thought it was nickels in the coin tray that kept cash register operators from getting sick. And don't taken any wooden nickels, Laddie. 

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19 hours ago, Jon Letendre said:

Unabashed,

We both have the bicycle sickness,  and now this, too?!

I have retained every pre '82  penny and every nickel I received in change over the past twenty years.

As you know every pre '82 (and some '82) penny is 95% copper (and 5% zinc, making them technically a brass, "gilding metal") and currently worth about 2 cents in copper at that metal's current value of about $3/pound.

And nickels are 75% copper and 25% nickel and have been worth about 8 cents but are currently worth only about 4 cents (just over 2 cents copper and just under 2 cents nickel.)

I buy brass like it is food. I like nice deep red high copper brass, and high zinc yellow, too. Any decent sculpture, ships' bells, any bell too large to hold (that hangs,) spent gun and artillery shells worked into vases and objects of art.

- - - Now that I got researching all this stuff to get my figures right, I discovered something I never knew about: World War II artillery shells were melted down throughout '44, '45 and '46 and made into the pennies minted those years. I knew about the '43 being steel, I even have a few uncirculated ones, but never knew about the artillery shell pennies which I am sure I have many of and will now have to go find and hold.

Same here on the pennies and the nickels.  I'm always checking my change.  I check all quarters and dimes, too.  1964 and previous quarters and dimes are the goods.  Made of 40 to 90 percent (I think) silver.  After '64 they're junk.  I change them for FRN at the bank and pay the light bill.  

My silver bullion collection started in 1984.  I bought a bottle of Pepsi from a machine and ten cents was my change.  When the dime fell down into the coin return I could see immediately from the glint off it that something was special about it.  It was a '64 dime.  I felt like the luckiest man in the world.  I had always wanted to start a silver collection anyway, so that was my inspiration to start. I still have that dime.  They are getting harder and harder to find however.   When I lived in Vegas, some of the casinos separated their junk silver coin from the rest of the coin.  Customers could walk up to the cage and buy as much as they had on hand or as much as they could at face value!  I was in heaven!  They don't do this anymore.  Vegas had phased out almost all coin machines by now. 

I did not know all this about the shell casings, etc.  I will have to look into that.  Amazing.  

My grocery store has a sign at the customer service counter now: "We are no longer giving out quarters".  Boo hoo!  This digital currency thing is going to suck for us!  They have been wanting to get rid of cash for a long time now. They are finally doing it.  

And speaking of the anti-bacterial properties, I love that ring!  I want one!  I recently bought a Dremel tool and snagged up some two, three, and four ounce cooper drop rounds from work.  They fall to the floor when they are cut from newly made parts.  They are pure copper.  I also get bronze and brass.  The management doesn't care if we snag those little items.  So I bring them home and have at them with my Dremel and create jewelry and coasters and whatever I can think of.  I have gone copper crazy.  I have mastered the cutting, sanding and cleaning of the red metal, but my engraving leaves a lot to be desired.  Workin' on it.  I am also re-taking up carving letters and some characters, etc., into wood and stone.    

I'm glad for the bicycle sickness.  I wish more of my friends had it.  Too many of them have the beer, TV and sitting on your ass and doing nothing sickness.  Gag me.  How incredibly boring.

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I haven't found silver in quarters since I was a kid. I think I found my last silver dime about five years ago. I scan for the tone/patina and edges very quickly.

My last notable silver score was at a local bank. After the real business I always say to the teller, "Do you think you have or any of those big pesky fifty cent pieces, like with John  F. Kennedy on front?"

So my last one, this was at least ten years ago, she answered, "oh, god, do I ever, and no one wants them and they sit here on this second tray I have. I even have the other ones, the founding father" (Benjamin Franklin halves from '40s, '50s and '60s.)

So she reaches for it and plunks down a tray of all 90% silver halves and only a couple were 40%. I see all the patina and white edges and I'm trying to stay cool.

"How many do you want?"

"Oh, gosh, let's just do the easiest thing and count them all and I'll take them all for you."

I gave her a $20 bill and she gave me two modern quarters and 39 silver halves. It was about $250 of silver then, so almost $400 today.

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7 hours ago, Peter said:

I thought it was nickels in the coin tray that kept cash register operators from getting sick. And don't taken any wooden nickels, Laddie. 

The copper must be raw, too.  Some copper products are lacquered, which nullifies copper's bacteria/virus killing properties. 

Brass and bronze, which are mostly copper, have the same effect on bacterial/viral nastiness.  Musicians who toot brass horns all the time get by far and away less cold, flu, etc.  People who work in brass, bronze and copper, too.  

Warriors in the bronze age sharpened their swords and used the shavings to dress wounds.  The metal kept them from deadly infections.  They didn't know why this worked, but it did so they used it. 

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50 minutes ago, Jon Letendre said:

I haven't found silver in quarters since I was a kid. I think I found my last silver dime about five years ago. I scan for the tone/patina and edges very quickly.

My last notable silver score was at a local bank. After the real business I always say to the teller, "Do you think you have or any of those big pesky fifty cent pieces, like with John  F. Kennedy on front?"

So my last one, this was at least ten years ago, she answered, "oh, god, do I ever, and no one wants them and they sit here on this second tray I have. I even have the other ones, the founding father" (Benjamin Franklin halves from '40s, '50s and '60s.)

So she reaches for it and plunks down a tray of all 90% silver halves and only a couple were 40%. I see all the patina and white edges and I'm trying to stay cool.

"How many do you want?"

"Oh, gosh, let's just do the easiest thing and count them all and I'll take them all for you."

I gave her a $20 bill and she gave me two modern quarters and 39 silver halves. It was about $250 of silver then, so almost $400 today.

Sweet.  Good score.  I never find them anymore either.  Plenty of good pennies, plenty of nickels, but if I want silver I have to buy it.  My favorite are one ounce rounds and ten ounce bars, bullion only.  The only numismatics I buy are the occasional silver Krugerrand and some Morgans, and only if the price is really right.  Those are numismatics worth having around.  People love them and pay top dollar for them without hesitation.   Aside from that, an ounce of silver is an ounce of silver, nothing more nothing less. 

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I like all those, too, and I have some, but everyone wants double spot. I am settling for sterling lately: one and two ounce bracelets with clear weights uncomplicated by stones, etc. And trays and bowls, candy dishes, candlestick holders, unweighted at bottom, again for clean understanding from weight how much silver is really present (and of course accounting for it being only 92.5% silver.) Even in the last 90 days I am getting it in for 85-105% of spot.

I have even had some success at shopgoodwill.com. For extra confidence, wait for the right auction with pics of the item on the scale with readout and pics of it in their $10,000 Niton x-ray metallurgical analysis machine confirming silver, gold, platinum, nickel, copper, zinc, tin, etc. content, and you see the readout and your item in the machine. (not all items up for auction have been run through the machine.) All the coins and bars are going for what the dealers charge, no deals there.

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1 hour ago, Jon Letendre said:

I like all those, too, and I have some, but everyone wants double spot. I am settling for sterling lately: one and two ounce bracelets with clear weights uncomplicated by stones, etc. And trays and bowls, candy dishes, candlestick holders, unweighted at bottom, again for clean understanding from weight how much silver is really present (and of course accounting for it being only 92.5% silver.) Even in the last 90 days I am getting it in for 85-105% of spot.

I have even had some success at shopgoodwill.com. For extra confidence, wait for the right auction with pics of the item on the scale with readout and pics of it in their $10,000 Niton x-ray metallurgical analysis machine confirming silver, gold, platinum, nickel, copper, zinc, tin, etc. content, and you see the readout and your item in the machine. (not all items up for auction have been run through the machine.) All the coins and bars are going for what the dealers charge, no deals there.

I like the site.  Interesting pieces on there: https://www.shopgoodwill.com/Item/100053748

Makes me want a lama bracelet!

Never gave sterling much thought 'til now.  Hmmm...

Silver used to be the working man's metal--or--the poor man's gold.  Now, it's for the rich. I'm reduced to scavenging copper.  And that's just all right by me. 

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If you have "old securities" or investments, don't change them for anything new. 2 to 5 percent  per year is NOW pretty good. Old cash stuffed in a purse? Spend it as needed instead of using a credit card. Using cash because of Covid-19, I would let 2 bucks or less be a gratuity. They will like you for it. You will be the king of the world!

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That bracelet is exactly what I am talking about, not complicated by stones or other non-silver, about one ounce.

32.3 grams X 92.5% (sterling) = 29.9 grams silver, which is 96% of an ounce with a current silver spot price of $29/ounce. So it contains $27.86 of silver. It sold for three and a half times that, but the uglier more common ones are going at 90-100% of spot. I got more tonight. I pick it up at the Colorado Springs Goodwill next week because I also have an item I won that does not ship: a big brass floor hanger with four bars that swivel about.

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1 hour ago, Peter said:

If you have "old securities" or investments, don't change them for anything new. 2 to 5 percent  per year is NOW pretty good. Old cash stuffed in a purse? Spend it as needed instead of using a credit card. Using cash because of Covid-19, I would let 2 bucks or less be a gratuity. They will like you for it. You will be the king of the world!

I sure don't want to go into anything new.  Hard goods are where it's at.  I am growing more into them and expanding on what I have already. 

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1 hour ago, Jon Letendre said:

That bracelet is exactly what I am talking about, not complicated by stones or other non-silver, about one ounce.

32.3 grams X 92.5% (sterling) = 29.9 grams silver, which is 96% of an ounce with a current silver spot price of $29/ounce. So it contains $27.86 of silver. It sold for three and a half times that, but the uglier more common ones are going at 90-100% of spot. I got more tonight. I pick it up at the Colorado Springs Goodwill next week because I also have an item I won that does not ship: a big brass floor hanger with four bars that swivel about.

54121292914849bmts.JPG70404932914851bmts.JPG

My wife loves brass.  She just loves the way it looks.  Little does she know her little collection is quite the investment.  I just smile as she gets tickled pink and buys yet another.

I like the idea of having my own little cottage industry a going, profitable concern.  I make my own soaps.  I could sell them.   One of the copper, brass, and bronze items I've made is a one ounce Mjolnir with a curved handle.  It's sanded smooth, down to at least 400 grit, so it can be rubbed and fondled, used as a bacteria, virus killing tool to promote health.  A while back I started getting a little cold and put my bronze Mjolnir up my nose a few times and held it there.  It killed whatever went up there and started tingling and festering away and I felt better in less than an hour and never got a cold. It is exactly one ounce of bronze metal,  so it could be used as a trade item or store of value.  I'd even engraved,  "Who is John Galt?" on the front of it, to be used as a conversation piece.  That got sanded off however.  As I said earlier, my engraving skills aren't there yet.  Need more practice.   Another item is a blanket pin.  Made by hand with simple tools, the survivalists go nuts over these things and pay around fifteen bucks for one.  Super easy to make.  I'm going to pound out a few leather + copper bracelets, too.  See how that goes.  

This stirling idea is intriguing.  I will keep my eyes open.  I do anyway.  Every garage sale and thrift store I walk into gets scoured for copper anything at all, high carbon steel cutlery, and generally things I can use and refurb for sales.   

More and more people need to do stuff like this and keep it alive.  Things are going to get rough.  And even if they don't, this is just too much fun!  Useful metal is value, is money.

 

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Not a bad price.  Still a buyer's market.  Some say silver will skyrocket to over FRN350.00+ when we crash. 

When I moved to NV in 2001, I was buying silver at  four bucks per Troy ounce.  Yeah.

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4 minutes ago, The Unabashed Pragmatic said:

Not a bad price.  Still a buyer's market.  Some say silver will skyrocket to over FRN350.00+ when we crash. 

When I moved to NV in 2001, I was buying silver at  four bucks per Troy ounce.  Yeah.

The Dow rose over 28,000 today and then went lower. 

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From: Steve Reed To: Atlantis <atlantis Subject: ATL: Fractional reserves and fraud Date: Mon, 12 Nov 2001 02:41:19 -0800 Kirez Korgan wrote that Nathaniel Branden expressed to him >shock at my assertion or implication that Objectivists reject fractional reserve lending. He drew an emphatic distinction: *Rothbard* may reject fractional reserve lending, but where on earth would I get the notion that *Objectivists* do likewise?

Objectivists do. Objectivists also beat their sex partners. Objectivists also steal office supplies. ... SOME, not all. (One good grammatical turn, I'd say, deserves another <grin>)

 More seriously, though, if the implication is that Objectivist principles entail a rejection of fractional reserve lending, then we're being far too needlessly specific. Such principles -do- reject fraud, more generally. The real question is as Kirez had asked about in his original post: Is the representation that lies at the heart of such banking an instance of fraud? Deposits which are claimed to be available to their owners upon demand may be used, -at the same time,- as the genesis of bank loans. Is that fraud? Yes, if the claim is availability -upon demand,- such loans -do- rest upon fraud. Two different claims are being made about the same money in the same respects: that it is held on deposit, ready for claim at any moment; and that it is ethically in use by being lent to other customers. The SAME money, mind you, in the SAME respects -- those of time and legal title.

 The issue isn't really any different in its fundamentals when some medium of exchange is used other than a commodity, such as gold or silver. But the latter makes it easier to grasp: If any number of bank instruments that say "This certifies that one ounce of gold is ON DEPOSIT and PAYABLE ON DEMAND" does not equal the number of ounces of gold ACTUALLY IN THE VAULTS of the bank and thus payable, it is an act of fraud. If one such instrument is not retired from circulation for every ounce redeemed, it is an act of fraud.

 Fractional reserves simply involve creating more claims to such a commodity than the amount of the commodity that exists in the possession of the bank. Such claims, in any amount, are as fraudulent as are excess numbers of deeds to the Brooklyn Bridge -- beyond one. All that is done by using fiat currency is substituting a new form of such "ounces," in this case created by State permission, and easily increased or backstopped by the State printing presses if the crunch comes.

 That's it, essentially. The cruncher comes with "on demand." Depositors are encouraged to believe that they may request all of their funds at any time, and that they will receive them. If it looks as if any substantial portion of depositors are going to ask in this manner, then the Federal Reserve will make sure that more engraved pieces of rag paper are available – as they did, by several hundred billions, before Y2K, for example.

 Such "on demand" applies to business or personal checking accounts, savings accounts, and certificates of deposit. These last are still on-demand money instruments, even though some interest is forfeited for their being redeemed prior to maturity -- that's a contractual penalty, and -no- principal is ever forfeited by such an action.

 What if some principal -is- so forfeited by early breaking of the contract? Or what if it allows payment to the depositor only under specific conditions or after an allotted time? Then it's not strictly "on demand," and in the context of banking, it is -not- fraud.

 Murray Rothbard recognized this by noting ("The Case for a 100% Gold Dollar") that the fraud at the heart of the system could be eliminated in one step, by making such deposits into -debentures.- These are securities, where the buyer accepts a contractual agreement to have money paid back (with interest) at a particular time, but where it cannot be demanded at will -- and, moreover, where the ownership of the money is openly transferred -to the issuer- of the debenture.

 As Rothbard pointed out, this one step would immediately reduce the money being circulated by a huge percentage -- because "reserves" would no longer be an issue. Any particular amount of money would exist only in the hands of the "bank," -or- in the hands of those who would borrow it under contract. Loans could not be pyramided upon five-percent (or whatever) "reserves," as only money placed -into the ownership- of the "bank" could be lent out to others, and such multiplication would be fraud.

 I use the word "bank" in quotes here because, in any sense of today's usage, the institutions would -not- be banks. They would be more closely described as finance companies. Whether the money would be paid back or not to these debenture holders (formerly "depositors") would be a matter of gauging investment risk. Stock, bond, and commercial paper values are not guaranteed, and the soundness of such securities would not be guaranteed. They might be issued along with a priority claim on a company's assets in any liquidation, but that wouldn't guarantee that such assets would be present, nor would their lack (by itself) constitute fraud.

 What would be gained is clarity, as well as an absence of fraud. Banking, as currently practiced, amounts to only one action: the ability, by government permission, to loan out more money (or use it as operating expenses) than is held on "demand deposit," without its being considered fraud under the law. Whether it's 1 percent more than deposits on hand, or (as is now allowed) up to 2000 percent more than deposits on hand, is ethically immaterial. -Any- such difference is fraud, period. It merely is not called that under the law.

 >[...] I have yet to read an Objectivist who argues as I do to identify the nature of fractional reserve lending as an efficient form of entrepreneurship essentially like any other form of investment.

 That's because few have been that brazen, Kirez. It rests upon well-obscured and legally permitted fraud. It's certainly "efficient" if the capital one lends out to others is -not- limited by the amount of capital fully and knowledgably transferred in title to one's possession. If, in short, one need only set aside one dollar in twenty to pay demanded claims, when the possible claimants are told that twenty in twenty will be provided.

 If you like strong analogies on the order of what Adam Smith created with his "invisible hand," among others, I can offer one. I'm not claiming anything close to the abilities of Smith, but I can say that I've never seen this analogy anywhere else, at least so far.

 Fractional-reserve banking involves, at its root, combining the functions of a money storage facility and a finance company. And this is where the initial fraud takes place.

 The first proto-banks, goldsmiths, -were- relatively more secure places to store commodity metals, and the receipts for gold or silver left on deposit were circulated by others as titles to money "equivalents." The difference, unlike a moving company's storage facility where -specific- goods are kept and must be returned to the owner, is that the same amount and fineness of metal would have to be returned to the receipt holder. (Such metal is thus "fungible," as your antique desk in the warehouse is not.)

 Where it became fraudulent was in the goldsmith becoming a finance company. Additional claims to gold on deposit were created to give to borrowers, under contract of repayment with interest. These were encouraged to be circulated, with the promise of their being backed by gold "on demand" if one wished to redeem them, but with the goldsmith knowing that no more than a few such claims would be so redeemed at any one time.

 ... If times were good, loans were repaid promptly in gold, and confidence in such receipts (or "notes") remained high, that is. If more claims were presented for redemption than existing reserves, by those who didn't trust these receipts, the goldsmith would be SOL, and the fraud would be evident.

 Unless, that is, the receivers of these receipts in trade were -forced- to accept them as payment. ("Legal tender" laws.) Or unless the entire matter of needing to cover redeemed receipts was made easier by eliminating the burden of having a commodity on hand ... and instead using fiat currency, which has a nearly zero marginal cost for -additional- production as against its presumed value. (To be thus supplied as needed by the governmental central bank.) Or both, as it happens.

 Nothing whatsoever has changed, in essence, about banking beyond the fraud practiced by those goldsmiths. It's merely that the fraud is now "legal" and is ultimately backstopped by government printing presses. And it all comes back to unethically mingling the functions of two different, distinct types of businesses to provide a cover for such fraud.

 A legitimate money storage facility would have receipts matching deposits, to be assured by whatever market devices arose to safeguard this (such as the use of independent auditors). It would have depositors -paying- for the service of such storage.

 American Express is an example of a close equivalent. Buyers of travelers' checks pay a fee for AmEx to hold money, and to guarantee its payment to others upon presenting a properly signed check. AmEx represents that the money involved IS present on its books and WILL be paid.

 You or a merchant can demand the money you paid for the travelers' checks at any time, under the contract terms. AmEx is not allowed under law to pyramid loans to others on top of that money -- and it wouldn't be prudent to do so in any event, for the checks are quickly redeemed. Those few that aren't become a reliable store of value, because a properly executed and presented check is NEVER refused for payment.

 A travelers' check buyer is not taking investment risk, in the strict sense. If even -one- claim is issued that could not ultimately be paid, it would constitute an act of fraud on the part of AmEx. (A buyer -does- take a minimal risk as to the payment network functioning properly. Here, one relies on a company's record for fulfilling claims promptly.)

 By contrast, look at a genuine finance company -- say, GMAC. It raises its capital for making loans to GM car buyers by selling debentures and other instruments. GMAC takes title to the money it receives. Those who buy such securities -are- knowingly accepting investment risk. The sustained success of GM car sales and other market factors are not guaranteed, but such a large company does have a track record and offers stability.

 GMAC cannot lend out more money to car buyers than it has on hand. In fact, it must cover its own expenses, so loans have to be -less- than what is gained from selling its securities. If the parent company wants to offer GM car buyers zero-percent GMAC loans, those have to be paid for by its holding more of the investment "paper" of its subsidiary. That money can't be cooked up by government fiat. This process has market checks, in audits done on behalf of the GM stockholders, and in estimations by market analysts and investors of the soundness of GM stock and GMAC paper.

 American Express provides safe storage of money and convenient payment instruments. It is not a bank, and there is no free lunch: Travelers pay fees for these financial services, and for their ubiquity and reliability.

 GMAC provides securities that offer an attractive return. It is not a bank, and there is no free lunch: Investors accept the possibility of losses, and make their judgments accordingly.

 Banks combine the two functions, use the money entrusted to them to speculate by making loans far in excess of what they hold, and are shielded from the consequences of fraud and miscalculation by government force. It only "works" out of the illusory stability of a fractional reserve, wherein few depositors will normally demand the money they are entitled to receive at any one time.

 As long as the depositors can pretend the money is present, the banks are left free to speculate with it. And if only one dollar in 20 is routinely demanded, they are allowed to hold that one in reserve and create 19 more on their books. Those 19 constitute the "free" lunch.

 Reality eventually demands that the meal be paid for. Either the fraud becomes evident, or its consequences are ultimately transferred to an inflated fiat currency that is created to "solve" its effects -- and would not be accepted in a free economy that had sounder alternatives.

 But the evasion of reality does not go away. And this, of all points, should be evident to Objectivists. SteveReed@earthling.net *

 From: Jimmy Wales To: atlantis Subject: ATL: fractional reserve banking with disclosure Date: Mon, 7 Oct 2002 11:27:05 -0700

 Imagine a free banking industry in a hypothetical rights respecting society.  Would that industry likely contain, at least in part, fractional reserve banks with disclosure?  Are there any individual rights grounds for forbidding them?

 There's no question that fractional reserve banking without disclosure would be fraudulent.  If the bank does not inform the depositors that their money will be loaned out, pretending instead that they will just stick it in a vault, that's fraud.  Perhaps more subtly, if the depositors are informed, but go out and write checks (promises to pay) without informing the recipients of those checks, then that's another potential case of fraud.

 But imagine a setup in which a bank offers to accept my money on deposit, with the stipulation that they will only keep part of it there, loaning out the rest at interest, and in which they inform me of this upfront, including a warning that if, heaven forbid, everyone comes to the bank on the same day, there could be trouble.  (But, the bank has purchased private insurance to cover such a risk.)

 On the checks that I use, it is clearly printed "This check is drawn against an account in a fractional reserve bank.  If that bank has a run, then when you go to deposit this check, you won't be able to cash it.  I will still owe you the money in such a case, so the risk that you face is that there will be a period of trouble in getting the actual cash."

 Well, perhaps rather than writing all of that out, it would be sufficient notice to have this be the default legal assumption (which it is today, of course), or at least to have a standard phrase to communicate this information "check drawn on fractional reserve bank" would be sufficient.

 Some might argue that such a bank could not compete with true "storage vault" banks, but (a) that's a pretty tough argument to make and (b) anyway it's irrelevant to the question of whether such banks should be legally forbidden. --Jimbo

 From: Tim Starr  To: atlantis Subject: ATL: Fractional Reserve Banking Date: Mon, 7 Oct 2002 11:31:40 -0700 (PDT) Are futures contracts also fraudulent?

 In fractional reserve banking, the promise made to depositors is to give them back their deposits upon demand (if they are demand deposits), and to pay them a certain rate of interest.  In exchange for secure storage of deposits, and making those deposits available to depositors on demand, the bank gets to draw upon the deposits to make loans. Where's the fraud in that deal, assuming that the bank keeps its promises? Tim Starr

 From: "Andy Dufresne" < To: atlantis subject: ATL: Fractional reserves Date: Mon, 07 Oct 2002 19:49:54 +0000 Jimmy Wales: "How, in a free society, do you propose to ban fractional reserve banking?"

 In part, Jeff Olson responded: "My short answer is that fractional reserve banking would be banned in a free society by the same means, and for the same reasons, that fraud and theft would be banned in such a society."

 Fraud?  Theft?  How is it fraud or theft if the bank admits to its customers up front that it is practicing fractional reserve banking?  Isn't the customer's decision at that point a weighing of extra risk vs. extra return on investment?  I suppose it would be a sticky situation determining at exactly what point the bank may legally deny money to its patrons; but sticky situations need not entail fraud.

 On the other hand, there are so many good people opposing fractional reserve banking that I'm apprehensive about this simplistic counter-argument.  It's difficult for me to believe that so many good economists have missed such a simple point.  Have they? Andy Dufresne

 From: "Andrew Taranto" To: "ATL" Subject: ATL: Yay! (Was: Fractional Reserve Banking) Date: Mon, 7 Oct 2002 16:00:30 -0400 (I'm glad to see this subject is finally getting some attention.)

 I think Jimbo hits the nail on the head when he qualifies the permissibility of fractional reserve banking ~provided banks grant full disclosure of their activities~. (I see now that Victor Levis makes this point too.)

 Tim Starr asks rhetorically, "are futures contracts fraudulent?" No, but that's because clients of futures exchanges (from brokers to individual traders) know full well the nature of futures; or at least brokers and exchanges take great pains to make all clients aware of risks involved with trading futures. Opening a futures account is by no means an automatic process, unlike opening a checking account at a bank, which for all intents and purposes is automatic.

 My suspicion is that the banking industry depends for its "success," at least in part, on ignorance. The leverage involved with futures (or options; or even trading stocks on margin) is pretty much common knowledge; the leverage of bank deposits and bank credit (i.e., bank money) is not. This is magnified by the fact that bank money is ubiquitous, while "trading instruments" are not; so most people probably take it as an article of faith that "there's no risk inherent in using bank money."

 An amusing test of this ignorance is: the next time you make a purchase, ask the clerk, waiter, or whatever, whether Federal Reserve Notes are acceptable for payment.

 And then: what keeps fractional reserve banking as [apparently] a viable business model? The FDIC, the Fed as "lender of last resort," legal tender laws, etc. Other businesses go into liquidation when their risk-taking doesn't pay off (as banks did pre-New Deal), but not modern banks: they have a "safety net" that's the envy of the welfare state. My guess is that in a free society, where government doesn't interfere in the economy – however you conceive it, either minarchistically or anarchistically – fractional reserve banking would be a marginal business model with a specialized clientele, something like the way over-the-counter derivatives are today.

 I think an interesting question is: could fractional reserve banking work beyond a flash-in-the-pan timeframe without some kind of institutional backup? (E.g., a central bank that can "inject liquidity into the system at a moment's notice.) I think the answer to that question would hinge on this one: are the risks entailed with fractional reserve banking insurable risks, in any meaningful sense of the word "insurable"? (Maybe Merlin could answer this.) Or from another angle: how different is the fractional reserve business model from a pyramid scheme? And are pyramid schemes ipso facto fraudulent? Andrew Taranto

 From: "William Dwyer" To: <atlantisSubject: ATL: RE: Fractional Reserve Banking Date: Mon, 7 Oct 2002 13:42:21 -0700 Jeff Olson claimed that fractional reserve banking is fraudulent, to which Jimbo replied, "How, in a free society, do you propose to ban fractional reserve banking?"

 Jeff solicited help from the list:  >George?  George, are you reading this?  Bill? Bill Dwyer?  Little help?

 I agree with Jimbo and Tim that there's nothing inherently wrong with fractional reserve banking, so long as people understand that their money is indeed subject to being loaned out, and that they are depositing it under that condition.

 In a free society, you would have two kinds of banks:

 1)         Those that held a 100% reserve and promised not to loan out its depositors' money, but in which the depositors might have to pay storage costs, and

 2)         Those that did not hold a 100% reserve, but disclosed its policy of loaning out its customers' deposits, and for which the customers not only did not have to pay storage costs but could even earn interest on their deposits.  The interest would be their reward for the risk they'd be taking that their money wouldn't be  available in the event of a bank run.

 People risk their money in the stock and bond markets in order to earn profit and interest.  Should that be illegal?  Then why wouldn't they be willing to put their deposits at risk in a fractional reserve bank in order to earn interest on them?

 However, as George Reisman points out, "n a banking system totally unprotected and unsupported by the government -- a banking system without any form of government controls, government inspections, examinations, assurances, guarantees, or endorsements -- people would realize that when they made deposits in banks that did not hold a 100 percent reserve, they were in fact taking some risk of loss.  They would realize that what they were doing was granting credit, not holding money, and that if they wanted to grant credit, they had better learn how to read a bank's balance sheet, how to evaluate it, and how to distinguish between good and bad banks.

 "Those not prepared to do this, and whose real intention was to hold money, would realize that if that is what they wanted to do, they should hold deposits at 100-percent-reserve banks.  The transferable deposits of fractional-reserve banks would cease to be regarded as money.  They would be regarded as credit instruments, to be held only by those prepared to grant credit, not by people desiring to hold money." (_Capitalism, p. 515) Bill

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Copper? How about Rearden Metal? One of the best scenes in all of literature is of Dagny Taggart in “Atlas Shrugged,” fighting a philosophical and Romantic battle for Hank Reardon at a cocktail party and winning:

“This?” Lillian was saying, extending her arm with the metal bracelet for the inspection of two smartly groomed women. “Why no, it is not from a hardware store, it’s a very special gift from my husband. Oh yes, of course it is hideous. But don’t you see? It’s supposed to be priceless. Of course, I would exchange it for a common diamond bracelet any time, but somehow nobody will offer me one for it, even though it is so very, very valuable.  Why?  My dear, it’s the first thing ever made of Rearden Metal.”

Dagny did not see the room.  She did not hear the music.  She felt the pressure of dead stillness against her eardrums.  She did not know the moment that preceded, or the moments that were to follow.  She did not know those involved, neither herself, nor Lillian, nor Rearden, nor the meaning of her own action.  It was a single instant, blasted out of context.  She had heard.  She was looking at the bracelet of green-blue metal. 

She felt the movement of something being torn off her wrist, and she heard her own voice saying in the great stillness, very calmly, a voice cold as a skeleton, naked of emotion, “If you are not the coward that I think you are, you will exchange it.”

On the palm of her hand, she was extending her diamond bracelet to Lillian.

“You’re not serious, Mrs. Taggart?” said a woman’s voice. 

It was not Lillian’s voice.  Lillian’s eyes were looking straight at her.  She saw them.  Lillian knew that she was serious. 

“Give me that bracelet,” said Dagny, lifting her palm higher, the diamond band glittering across it.

“This is horrible!” cried some woman.  It was strange that the cry stood out so sharply.  Then Dagny realized that there were people standing around them and that they all stood in silence.  She was hearing sounds now, even the music; it was Halley’s mangled Concerto, somewhere far away.

She saw Rearden’s face.  It looked as if something within him were mangled, like the music; she did not know by what.  He was watching them.

Lillian’s mouth moved into an upturned crescent.  It resembled a smile.  She snapped the metal bracelet open, dropped it on Dagny’s palm, and took the diamond band. 

“Thank you, Mrs. Taggart,” she said. 

Dagny’s fingers closed about the metal.  She felt that; she felt nothing else.

Lillian turned, because Rearden had approached her.  He took the diamond bracelet from her hand.  He clasped it on her wrist, raised her hand to his lips and kissed it. 

He did not look at Dagny. 

Lillian laughed, gaily, easily, attractively, bringing the room back to its normal mood. 

“You may have it back Mrs. Taggart, when you change your mind,” she said.

Dagny had turned away.  She felt calm and free.  The pressure was gone.  The need to get out had vanished.

She clasped the metal bracelet on her wrist.  She liked the feel of the weight against her skin.  Inexplicably, she felt a touch of feminine vanity, the kind she had never experienced before: the desire to be seen wearing this particular ornament. From pages 149-150 of “Atlas Shrugged.”     

 

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13 hours ago, Peter said:

Copper? How about Rearden Metal? One of the best scenes in all of literature is of Dagny Taggart in “Atlas Shrugged,” fighting a philosophical and Romantic battle for Hank Reardon at a cocktail party and winning:

“This?” Lillian was saying, extending her arm with the metal bracelet for the inspection of two smartly groomed women. “Why no, it is not from a hardware store, it’s a very special gift from my husband. Oh yes, of course it is hideous. But don’t you see? It’s supposed to be priceless. Of course, I would exchange it for a common diamond bracelet any time, but somehow nobody will offer me one for it, even though it is so very, very valuable.  Why?  My dear, it’s the first thing ever made of Rearden Metal.”

Dagny did not see the room.  She did not hear the music.  She felt the pressure of dead stillness against her eardrums.  She did not know the moment that preceded, or the moments that were to follow.  She did not know those involved, neither herself, nor Lillian, nor Rearden, nor the meaning of her own action.  It was a single instant, blasted out of context.  She had heard.  She was looking at the bracelet of green-blue metal. 

She felt the movement of something being torn off her wrist, and she heard her own voice saying in the great stillness, very calmly, a voice cold as a skeleton, naked of emotion, “If you are not the coward that I think you are, you will exchange it.”

On the palm of her hand, she was extending her diamond bracelet to Lillian.

“You’re not serious, Mrs. Taggart?” said a woman’s voice. 

It was not Lillian’s voice.  Lillian’s eyes were looking straight at her.  She saw them.  Lillian knew that she was serious. 

“Give me that bracelet,” said Dagny, lifting her palm higher, the diamond band glittering across it.

“This is horrible!” cried some woman.  It was strange that the cry stood out so sharply.  Then Dagny realized that there were people standing around them and that they all stood in silence.  She was hearing sounds now, even the music; it was Halley’s mangled Concerto, somewhere far away.

She saw Rearden’s face.  It looked as if something within him were mangled, like the music; she did not know by what.  He was watching them.

Lillian’s mouth moved into an upturned crescent.  It resembled a smile.  She snapped the metal bracelet open, dropped it on Dagny’s palm, and took the diamond band. 

“Thank you, Mrs. Taggart,” she said. 

Dagny’s fingers closed about the metal.  She felt that; she felt nothing else.

Lillian turned, because Rearden had approached her.  He took the diamond bracelet from her hand.  He clasped it on her wrist, raised her hand to his lips and kissed it. 

He did not look at Dagny. 

Lillian laughed, gaily, easily, attractively, bringing the room back to its normal mood. 

“You may have it back Mrs. Taggart, when you change your mind,” she said.

Dagny had turned away.  She felt calm and free.  The pressure was gone.  The need to get out had vanished.

She clasped the metal bracelet on her wrist.  She liked the feel of the weight against her skin.  Inexplicably, she felt a touch of feminine vanity, the kind she had never experienced before: the desire to be seen wearing this particular ornament. From pages 149-150 of “Atlas Shrugged.”     

 

Yes! A great scene! I've wanted one of those bracelets ever since I read that!

Francisco's speech on money really got to me,  too.  I was nine years old when I asked my dad about money for the first time.  I did not understand it, where it came from, how it worked.  I just knew that I was much better off with it than without it and the more of it I could lay my hand to the better everything in the world could be for me.  Dad didn't have a rational explanation for any of it, no clear understanding of money himself.  He left me more confused than I was before.  But I could see his point about the bills being "printed up", as he explained it.  Obviously they were printed.  I asked why people didn't just print up their own money and be done with it.  They wouldn't even have to work anymore.  Dad said that would be "counterfeiting". Counterfeiting? Really? What makes this money not counterfeiting?  Dad just laughed at me, trying to hide what he did not know to begin with.  I was burning to understand more.  I asked a lot of people about this before giving up.  I thought I was just too stupid to understand it.  It wasn't until I read Rand's speech on money over twenty years later that I began to grasp that our entire money scheme was a fraud and that is why I could not understand it all that time.  I had been looking for the integrity, the foundation, the value in our so-called "money" (it isn't money--it's simply debt, fraud, a scam, a shakedown) -- where there is no value.  Rand helped me understand the missing link.  And the money is just the beginning.  The fraud permeates nearly every aspect of our lives and it is what has ruined what could have been a true evolution for mankind and set us off in the opposite direction.

 

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I actually disagreed with Francisco's speech.  Money COULD be the root of good, but currency regulated by government is evil.  So there's only two sides: like a coin.

oh, in that video I saw a penis

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I remember when Trump entered office he said we will not be addressing the debt. I wonder what he will prioritize in the budget for 2021 and onwards?  

Tucker Carlson said tonight: “America’s cities are collapsing before our eyes . . . .” Well said Tucker, and the state’s governors who those cities are in, want federal handouts to bail out their poorly run, bankrupt territories. They want decently run states and America's producing class to subsidize them. Peter

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6 hours ago, atlashead said:

I actually disagreed with Francisco's speech.  Money COULD be the root of good, but currency regulated by government is evil.  So there's only two sides: like a coin.

oh, in that video I saw a penis

Money is the root of good.  The so-called "currency" "regulated by government" is not in fact money, nor is it regulated by government, but issued and regulated by a company owned by privateers.  We have no idea who they are.  Call it what you like.  "Evil" is appropriate, among other things.  

Article one section eight of the USA Constitution describes one of government's most important duties: to coin the money and regulate the value thereof.  And in doing so this business should be 100% transparent to the people at all times.  Nor should it be so that the people must be made to use only government issued coin in their affairs, but free to do what they like, trade however they like, and especially in their own local currencies, and protected by their government while they're doing it.  Of course this isn't going to happen, but at least we have the plan.  We could work up the savvy and take our chance yet.  Ya never know.

Gold is gold, silver is silver, copper is copper, platinum is platinum, and so on down the chart of valuable elements.  They have no substitutes. There are no substitutes for value. 

Liberty nor chances are given.  They are taken.  

The only good in the world is you and others like you doing good things.  That is value.  That is money.  That is the root of all good.

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