Prof. Lawrence H. White responds to Jesus Huerta de Soto on Banking

Thanks to Prof. Steven Horwitz who emailed me a series of responses to Jesus Huerta de Soto's major work against fractional reserve banking, I am pleased to re-publish them. The original site these are supposed to be found on does not seem to be up anymore. Here is part 1 of 3.

South Canterbury Finance BB+ rating affirmed

Today Standard and Poors affirmed South Canterbury Finance's BB+ credit rating.

5 Departures at South Canterbury Finance

It started on the 28th of August 2009 with the resignations of two directors: Stuart John Nattrass, and Robert Alexander White.

South Canterbury Finance: $4m loss = 'a small profit'

On a 15 November 2009 post:

South Canterbury Finance: New Losses Reported

I wrote:

On 29th Oct 2009, it was reported 'South Canterbury Finance is the third-biggest PGC shareholder with just over 4 per cent, preserving its previous more than 4 per cent stake by taking part in the rights issue.' On 30th June 2009 the shares in PGC closed at $2.03, today they are about $0.48, and the rights were not of significant value. This translates to about $6.4m in losses for South Canterbury Finance on this shareholding.

 Today Radio New Zealand reported:

Banking and banking crisis made as simple as a Banana Smoothe by Westpac

Apart from the hand wringing about not bailing out banks and the relief of bailing out banks this one is useful and maybe funny, too!

South Canterbury Finance Poll Results

Today is 3 months since Standard and Poor's put South Canterbury Finance on Credit Watch negative, and we are still waiting for the resolution. I've been told that 3 months is indicative, and that Credit Watch can be resolved before or after this period, so I guess that means that it isn't expected today.

Responding to Jesus H de Soto on Banking

Jesus H de Soto's,  900 page work MONEY, BANK CREDIT, AND ECONOMIC CYCLES is the bible of the anti-fractional reserve banking school that dominates modern libertarian/free market thinking on the topic of money and banking, and represents the views of Walter Block, Lew Rockwell, Hans Hoppe, Tom Woods, not to mention the late Rothbard.

Jesus on the Law: The Law for Man or Man for the Law?

A few days ago, since engaging Prof. Walter Block on fractional reserve banking (see Answering Block's Bank Impossibility Claim) I have also started reading Jesus Huerta de Soto's nearly 1000 page book Money, Bank Credit and Economic Cycles and so far I'm up to the start of Chapter 3, page 115, where de Soto adresses arguments to legally justify fractional reserve banking. He writes:

Answering Block's Bank Impossibility Claim

UPDATED WITH RESPONSE FROM BLOCK 12th Dec: Back in November 2008, Dr Walter Block, wrote a response to Prof. Eric Posner on fractional reserve banking (frb). Block is opposed to frb while Posner is not. Although I did respond to Block at the time, and posted these two posts:

Property Rights Analysis of Banking

and

Banking Defined and Defended, Part 1

which provide the best of my work explaining and defending fractional reserve banking, I took another look at Block's response to Posner again yesterday and realised he makes a further claim that also deserves an answer. The claim from Block:

No Dishonesty about what they do with their deposits

Well, as an answer to those anti-fractional-reserve-bankers* who claim depositors have no idea what banks do with their deposited money, and that banks mis-represent their contract as a warehouse receipts rather than as a credit contracts, or take property they are obliged to hold in safekeeping to use it for lending, here is an honest bank ad that tells it like it is!

South Canterbury Finance IPO -- Maybe not?

As the weeks go by, some talk about IPOs or floats of Southbury assets such as Helicopters NZ and Scales Corp is filtering through to the news, such as this article: