Think about it this way... If you are in debt, you hold an account payable to a bank that's greater than your assets currently on hand. Are you committing fraud? Before you answer, realize that this is the exact same scenario that the bank engages in, except that there are different actors in play and the banks do this en-mass.
Or, hows about this one... Insurance providers rarely, if ever, have enough reserves on hand to handle all of their liabilities if a large number of people place legitimate claims under their contracts. Is this fraud? Again, it's a nearly identical scenario.
FRB isn't fraud. There is certainly risk management involved, but it isn't fraud.
"the FRB could survive a longer run only if there is an entity of last-resort-lender"
This isn't the case. You're assuming, first, that any non-100% reserve rate would result in bank runs, and that said bank runs would bankrupt all banks. Second, you're assuming that any such bank runs would bankrupt all banks, thus removing the FRB system. I could go in-depth as to why these are incorrect assumptions, but I think some minor thought put onto my explanation of the assumptions themselves should reveal that reasoning.
As for the economic arguments you make, I would love to see your supply/demand analysis given the circumstances leading up to changes in reserve rates. For example, if an increase in deposits occurs, how does this affect the money supply, and in turn, what does this do to prices? Or, if the reserve rate goes down due to a change in society's time preference (see also, discount rate, or interest rate,) is the drop in reserve rate the cause, or effect, of any increase in prices that follows?
I used to be against FRB, but now I'm not 100% certain. There's far too many variables to account for. In the case of FRB under Bitcoin, I believe many of those variables will be accounted for in a way that enables markets to properly set both reserve rates and interest rates in light of changes in the values of said market. And, you must remember, changes in prices are not necessarily good nor bad in and of themselves. If there's a lower reserve rate due to changes in market values, that will likely coincide with an increase in prices. This wouldn't be bad at all -- in fact, it would be a sound market correction due to changes in supply/demand.>
Yes, FRB is fraud. The bank doing FRB claims all your deposit is available at any time. That is a lie because they are playing with your money and trying to earn profit on that, and therefore not all your money is available at any time as they claim. That is the nature of fraud, somebody claims something which is not true.
If you store your furniture in a storage facility, and they would use it at the same time, it would be the same kind of fraud.
Insurance is a business, if insurance company is not able to fulfill its obligations to its clients then it is fully liable for it like any other kind of business, which could be caused by bad management bad calculation, but not fraud. There is no FRB involved.
To the economics, don't you see how much new money is being printed by FEDs nowadays in order to keep otherwise failed institutions alive? They do that only because otherwise those institutions would be insolvent because of FRB. Therefore the bailouts , and therefore the increase of money supply which causes inflation.
Without central bank, all the FRB banks would fail sooner or later, because any suspicion of bank not having enough reserves would cause bank run. Then no business would try to repeat such model, since it would render highly unprofitable.
