A house of cards
Was gonna say that was Ludwig von Mises' criticism of the fractional reserve banking system as a whole, but apparently it was Ron Paul.Unfortunately, all of this is the predictable result of a fiat paper money system combined with fractional reserve banking. When governments and banks collude to monopolize the monetary system so that they can create money out of thin air, the result is a business cycle that wreaks havoc on the economy. Pyramiding more and more loans on top of a tiny base of money will create an economic house of cards just waiting to collapse. The situation in Cyprus should be both a lesson and a warning to the United States. We need to end the Federal Reserve, stay away from propping up the euro, and return to a sound monetary system.
I think visually and when I hear about the "pyramiding of loans on a tiny base of money," I see a house of cards. When I'm able to look at the people I know and realize that the house is potentially built on them, and I know their behaviors, then it's even scarier. -that's 2008.