Daily Bell: Do you believe in private fractional banking or should it be illegal?
Dr. Joseph Salerno: I am neither a philosopher nor a legal theorist, but I believe in the absolute right of individuals to enter into any voluntary contract that they choose. But a contract must be meaningful to be enforceable. If I pay you for a promise to paint my house red and green all over, this is not a contract but an absurdity. Likewise if I pay you (or even if you pay me) to store my motorcycle in your garage so that it is always available for me to use it and I grant you the freedom to rent it out at will. My point is that the deposit contract as modern free bankers conceive it, is a meaningless fiction. It implies that a sum of money can be both maintained on deposit for instantaneous withdrawal by the depositor and lent out to a borrower.
Motorcycles are not fungible. Just a "small" oversight on Salerno's part.
What Salerno doesn't seem to understand is that money and financial relation is legal contract enforced by law. It has just as much meaning as the law does. How much meaning does it have when government declares that you have to pay a head tax and the only acceptable form of payment is the same money that government issues Itself?
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