Lawful Money and the Bank

[Rock Anthony]

I like the coin keeper idea.

On the original post of the thread - getting a bank agreement with 'lawful money' - so what was the point? statues/rules stipulate they (bank/otherwise) can substitute FRNs...

Funds that are born from fractional reserve lending are a form of intangible credit - it exists only as electronic book entries into the banks' computers. However, when John Doe withdraws $100 from an ATM, he has in his hand tangible Federal Resrve notes, not intangible credit.

Federal Reserve notes are already bonded by the the United States. Therefore said notes are obligations of the United States - the US is responsible for paying the principal and interest on the debt money.

However, that intangible Fed credit that is born from fractional reserve lending is not bonded by the United States. It's bonded by whomever gives signature endoresement to that credit. Therefore those that endorse this intangible Fed credit are responsible for paying the principal and interest on that debt money - not the US.

The point of amending a bank agreement, such that only lawful money of the United States is handled within whatever bank accounts, is to avoid using Fed credit altogether. If John Doe has such an agreement with Bank of America, then no funds created via fractional reserve lending (aka Fed credit) are ever bonded by John. John never obligates himself to the debt.

If John Doe never has a need or desire for Fed credit, then why should he bond himself to it? Well, he shouldn't! When John pulls $100 from an ATM, he receives FRNs that are obligations of the US. John is fine with not sharing in that obligation.