>>4300 >Are naked shorts equivalent to fractional reserve banking? Not exactly. Rothbard's point about fractional reserve banking was that a demand deposit is a pledge to pay on demand--at any time that the depositor wishes. Naked shorts involve a pledge to deliver an asset--but the SEC allows for a two-day window after the short sale to "settle" the transaction. Even though now the settlement period is set by a government administration, this could be easily done in the free market, both with trading and with banking. David Friedman noted that Scottish banks had options clauses in their contracts, where if they were not able to deliver payment on time, they could agree to pay with interest at a later date. >Are they both fundamentally fraud? I wouldn't consider a naked short to be fraud until after the settlement window. >Also, I recall reading a description of some country that had a 100% reserve system because any banks that were suspected of being fractional reserve would get "stress-tested" by the other banks. Anyone know what I'm talking about? I think you're talking about Rothbard's explanation in "What Has Government Done to Our Money" of why in a free market, even a fractional reserve banking system would tend towards, if not satisfy completely, 100% reserves. Basically, banks can conduct bank runs on each other: Bank 1 suspects that Bank 2 has issued money in excess of reserves. Bank 1 can call upon Bank 2 to deliver reserves for all checks written by customers at Bank 2. If Bank 2 fails to deliver, everyone knows it doesn't have the reserves. Because nobody wants to be caught with their pants down, this disincentivizes inflating the money supply.

>>4301 >>Are they both fundamentally fraud? >I wouldn't consider a naked short to be fraud until after the settlement window. So then check bouncing isn't fraud?

>>4302 Of course check bouncing is fraud. How does what I said imply that it isn't?

>>4303 >I wouldn't consider a naked short to be fraud until after the settlement window. >I wouldn't consider a bounced check to be fraud until after the settlement window. How are these statements different?

>>4305 Is it also O.K. for me to steal your couch--as long as you get it back in the evening before you come back home from work?

>>4305 A "bounced check" is by definition "after the settlement window". >>4306 How is stealing a couch analogous to this situation? To steal a couch, you would have to break into someone's property and then seize something that they already owned. It'd be more like if I paid you to deliver me a couch and you promised to deliver it after I come back home from work. Is it fraud because I didn't get the couch exactly when I paid?

>>4308 ...I hope I never do business with you. Holy shit.

Your taxes pay for illegal immigrants, debt, war, curfews, gun bans, NSA wiretapping, checkpoints, forfeiture, the end to the right to silence, free speech bans, torture, kill lists, no fly lists, searches without warrants, private prisons, mandatory minimums, 3 strikes laws, DNA databases, CISPA, SOPA, NDAA, IMBRA, FBAR, FATCA, TSA groping, secret FISA courts, and Jade Helm.