ALB wrote:In any event, the
ALB wrote:
In any event, the gold reserves held by central banks has nothing to do with fractional reserve banking properly so-called nor with backing the currency the government or the central bank issues. That was abandoned a long time ago.The term "fractional reserve banking" was originally coined to describe the policy, pursued by governments in the 1950s and 1960s, of trying to control the amount of bank lending by varying the proportion ("fraction") of their assets that they were required to hold as cash and/or some other liquid asset ("reserves"). This was later abandoned in favour of trying to control bank lending by manipulating interest rates instead. Now they are trying to control it by imposing limits on what banks can lend by only allowing them to borrow money to re-lend up to a proportion of their own capital. Which of course is a recognition of the fact that this is what banks do — borrow money to relend, not create it out of nothing as the currency cranks claim
The government of Venezuela repatriated all their gold deposits ( more than 11 bn ) from different banks. and placed them on the National Reserve Bank of Venezuela, and despite that, the national currency has been devaluated,( 73% ) and there is a hyper inflation of 53 %, along with a high rate of unemployment. There is a large scarcity of dollars on their national reserve