Reply #72: But the bank is never forced by the court to honor bad checks [View All]

[MindMatter]

The bank may be forced to accept a loss as part of a bankruptcy settlement. I get that. And the bankers keep pushing for laws that push us deeper and deeper into credit that is unlikely to be paid. Why would they do this? Because the deck is so stacked in their favor, it is almost beyond imagination.

Once again, the practical effect of the fractional system is that they are able to lend many times the original deposits, so they can afford an amount of bad debt that any normal business could never survive. I'm not saying that banks like bad debt. Of course they don't. But they really, really like the system that enables them to maximize their earnings by putting us into impossible debt situations, even when that increases their uncollectibles.