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'..a “monstrous” (according to Clemente de Diego) legal institution..'

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Bankers

Crime: systematic violation of private property rights.

Accomplices: central planners and those twisting the meaning of a deposit and/or a loan contract.

Criminal activity: supported and condoned by positive law (positivism.)

Corrupting: two institutes concerning the state and the banking system.

Corrupting concept: the fractional-reserve-system.

Deforming effect: destroys society.



'..the demand deposit in fractional-reserve banking, despite its being a “monster” or “legal aberration,” can only be accounted for insofar as it was initially tolerated and later deliberately legalized by those exercising political power.'

'In short, whichever way you look at it, the monetary irregular-deposit contract cannot be equated with the mutuum or loan contract. The two are essentially incompatible, and the existence of the demand deposit in fractional-reserve banking, despite its being a “monster” or “legal aberration,” can only be accounted for insofar as it was initially tolerated and later deliberately legalized by those exercising political power.32 Nevertheless, the fact that such a “monstrous” (according to Clemente de Diego) legal institution plays a role in the course of human interaction inevitably produces damaging economic and social consequences. In the following chapters we will explain why fractional-reserve banking is responsible for the crises and recessions that repetitively grip the economy, and this will constitute an additional argument against the legitimacy of the bank-deposit contract, even when both parties are in perfect agreement. Furthermore, this explains the impossibility of at all times guaranteeing the repayment of these deposits without the creation of a whole government super-structure called the central bank. Once this organization has established a monopoly on the issue of paper money and declared it legal tender, it has the function of ensuring the creation of all the liquid assets necessary to satisfy any immediate need private banks may have for funds. In chapter 8 we will study the resulting emergence of a centralized monetary policy, which like all attempts to coordinate society through coercive measures (socialism and interventionism), and for the same reasons, is ultimately doomed to failure. Indeed, central banks and governmental monetary policy are the main culprits in the chronic inflation which in varying degrees affects western economies, as well as in the successive and recurrent stages of artificial boom and economic recession which cause so many social upheavals. But first, let us continue with our legal analysis.'

- Jesús Huerta de Soto, Money, Bank Credit, and Economic Cycles (Third Edition, 2012, pdf), page 146 and page 147

32 That is, fractional-reserve banking conflicts with traditional legal principles and only survives as a result of an act of coercive intervention found in a mandate or governmental statutory privilege, something that other economic agents cannot take advantage of and which expressly states that it is legal for bankers to maintain a fractional-reserve ratio (Article 180 of the Spanish Commercial Code).



*** Example

Russia's fifth largest bank, Bank of Moscow, has been given the biggest bail-out in Russian history, 1 July 2011