The only thing that matters from the depositor's point of view is the probability of being able to redeem a deposit in various scenarios. The reserve ratio is only one component to that.
As an extreme example, what would you prefer: An FDIC-insured account in your name, or handing cash to a guy you found on craigslist who's promising to safely bury it for you in the forest?
Indeed, we have been given convenience and a promise of security, but the way in which we operate is not sustainable for the vast majority of people, over a long enough timeline, imo.
As to what I'd prefer (my not having the slightest clue as to how to operate within it notwithstanding): barter and trade. Yes, I know that a lot of the things we enjoy now wouldn't be easy under such a setup, but as with all things that make life easier, there's always a cost in the end. Bargaining with the devil always seems like a great idea until you read the whole story.
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The only thing that matters from the depositor's point of view is the probability of being able to redeem a deposit in various scenarios. The reserve ratio is only one component to that.
As an extreme example, what would you prefer: An FDIC-insured account in your name, or handing cash to a guy you found on craigslist who's promising to safely bury it for you in the forest?
Indeed, we have been given convenience and a promise of security, but the way in which we operate is not sustainable for the vast majority of people, over a long enough timeline, imo.
As to what I'd prefer (my not having the slightest clue as to how to operate within it notwithstanding): barter and trade. Yes, I know that a lot of the things we enjoy now wouldn't be easy under such a setup, but as with all things that make life easier, there's always a cost in the end. Bargaining with the devil always seems like a great idea until you read the whole story.