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What is fractional banking?


A banking system in which only a fraction of the total deposits managed by a bank must be kept in reserve. The amount of the deposits equals the amount of the reserves times the deposit multiplier. In the U.S., this system is maintained by the Federal Reserve Board.


Fractional RESERVE Banking is the system with which we are saddled today. Without going into a long rant about the threats posed by fiat currency, overly-leveraged banks playing dangerous games, etc. I offer up the definition in Wiki's mind's eye ...


Today's Fed ain't your typical Austrian School form of banking. ;-)

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