Does fractional reserve banking lead to a cycle of perpetual debt?

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A reserve currency (or anchor currency) is a currency that is held in significant quantities by governments and institutions as part of their foreign exchange reserves. The reserve currency is commonly used in international transactions and often considered a hard currency or safe-haven currency.

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So whats your point?

What does that mean Phat?

I mean what is your point aside from asking me if I understood the term? I had to look it up---I have always been told that it will be a crises, (If we are no longer the dominant reserve currency) and what I have read seems to confirm that " People who live in a country that issues a reserve currency can purchase imports and borrow across borders more cheaply than people in other nations because they don't need to exchange their currency to do so." also that " the world's need for dollars has allowed the United States government as well as Americans to borrow at lower costs, granting them an advantage in excess of $100 billion per year.[2] However, the U.S. dollar's status as a reserve currency, by increasing in value, hurts U.S. exporters.[3]"The article mentions that there are several "reserve" currencies, though the dollar makes up over 2/3 of the mix.
The article also says Finally, I don't know why you always make me look stuff up! Your socratic dialogue style of asking questions can at times be annoying!add by edit: And this is our right! If we dont export inflation it will become our exclusive problem. Edited by Phat, : No reason given.

And there you say it all; that for some reason you think you should be entitled to yet another advantage.

The point is that the OP just begged us to address the topic. Nonetheless, despite not understanding what the topic is, you continue to post based on your own agenda. I am personally very interested in hearing folks take on fractional reserve banking, but I don't have much to add right now. My personal view point is that fraction reserve banking, when correctly applied is a great driver of the economy. But perhaps there are some downsides.Edited by NoNukes, : No reason given.

Firstly, I don't blame any specific American for the following, just to be clear.
The US abused it's elevated position after WW2 to gain the US $ reserve currency status. It is not the right of the US. I think it's a fair bet that the dollar will lose that status eventually, so you guys should really look at giving it up willingly over an agreed amount of time to prevent it happening all at once and the economic shock that would cause. ABE: As in, x amount of countries start trading in whatever currency they like every year for the next x years.
It's funny that your govt is one of the loudest voices promoting the free market, as long as it's freely trading in US $.Edited by Riggamortis, : No reason given.

I think the main problems with FRB stem from two key issues.
Private, profit driven companies have the exclusive power to decide who can access new money and what they can spend it on.
That new money is created as interest bearing debt puts pressure on the lender to immediately make a return above the interest they must pay.
This is one of the reasons behind stagflation. When business' start laying off workers due to an economic slowdown, less people can consume and turnover drops more. They still have to service the interest on their debts, however. Prices are raised to increase turnover but then even less can consume and the cycle continues. In a system where new money is created and lent for a one time cost recovery fee, this would not be nearly as much of a problem. As I understand it anyway.Once you realise that money is labour(anyone want to argue about that?), the need for new money creation is obvious. The idea that we should pay banks just for keeping track of who owes what seems silly and other preferable ideas start to fill your head.ABE: I should have joined a finance forum really, but you lot had already taught me so much and earned my respect, so I value your opinions more than I would some randoms.Edited by Riggamortis, : No reason given.

All I'm saying is that the reserve currency status is one of the last effects of the aberration period after WWII. I dont deny that it has been advantageous. What I fear is that once we step off of that artificial construct it will mean a major decrease in the standard of living and buying power for many middle class/working class Americans. Im all for doing it gradually over several decades.

Perhaps middle class Americans(westerners in general) should be more appreciative of how lucky they are to be born rich. Our self entitled attitudes make me sick. We are to Africans as the 1% are to us. I honestly don't give a flying fuck if a few westerners miss out on their daily latte if it means the impoverished get a daily meal. Just as I don't care if a few billionaires lose their private jets if it means everyone else can have a place to call home.

Several points.Reserve Currency has absolutely nothing to do with Fractional Reserve Banking. You saw the word Reserve and jumped immediately onto defending what you consider an entitlement. You still don't know what Reserve Currency really means or why it would effect you and do not seem to understand that the system has been changing gradually over MANY decades. And the period right after WWII WAS an aberration. Guess what. Aberrations by definition are transient. We have had a half century to prepare fore the effects of that aberration and have not even taken the first step of educating American to the fact that it was an aberration.When the last vestiges of the aberration ends we almost certainly will get hurt but there is no one to blame for any pain except Americans and America.There are two steps you can take. First try to address the topics instead of whining about Phat. Second prepare yourself for the coming effects. Stop hoping some outside force will do it for you.

How far would you go in not caring, however? What if more than a few Westerners had their retirement savings cut in half? What if the effect was not a latte but a LOT,eh? Like say twenty five-fifty thousand dollars per household?

Im still questioning whether or not there is some way to avoid the pain. I am well aware that I need to tough it out. I am also planning for the inevitable. He will have to do it for us eventually. We are charged to try, but we will fail. Your pride will have to be laid at His feet.And what does all of this have to do with fractional reserve banking? The fact that money too will fail at some future point.

Do you know what Fractional Reserve Banking is?

I believe so, yes.

We have an age pension in Australia so our retirement fund is 'extra'. I'm not sure how it works in US, but the difference could affect how much we fear losing our fund. As our age difference certainly would.
Considering 18,000 children die everyday from malnutrition in the third world, but that is what(one thing) I want to prevent, then right up to the point before children start dying from malnutrition in the west. That is if I suspend emotion and self-interest, look at it simplistically and ignore other factors.