I'll take a shot



1st change perception on the monetary system instead of listenting to the radicalized propaganda by the rabble rousers. Also understand that the monetary system and economic system are 2 separate (though intertwined) systems.



Fractional Reserve Banking in a nutshell



1) The government decides how much money to inject into the economic system.

2) The central bank distributes the "at the top" money to the government with interest. ANYBODY can invest into this money, they are treasury bonds.

3) The fractional reserve ratio kicks in, and this money is multiplied and circulated throughout the economy with a supply and demand economic model.

4) Work is done, and this work should be as ruthlessly efficient as possible.

5) Another wave of money is injected into the system, and based on the tangible output of the economy, this new wave of money is more abundant. (the idea here is not to increase the value of your currency, but rather stabilize it by injecting more units of currency than last time) Part of this increase is used to pay off the treasury bonds (with interest) from the previous injections, so people holding bonds are paid. (and if all goes well, gaining more value then they put in)

note: That this disipation process takes several yearly cycles, that is why you need to wait for bonds to "mature" before you can cash them out.



Why fractional reserve banking is superior to all other monetary systems used previously.



1) There is ALWAYS a large supply of money entering the system (so the money supply cannot be constricted)

2) The currency can be dynamically altered every "injection" cycle to match the reality of your economy, and stabilize fluctuations in the value of your currency.

3) When you do work efficiently, everyone prospers, because more work is done per unit of currency, ergo each unit of currency a person can command has more value.



How to ruin your currency



1) Government fails to disipate outstanding currency on schedule (bond holders don't get paid)

2) Too much currency is injected into the system based on the work being outputted by the economy, causing inflation and devaluation of the currency. (bond holders lose relative value instead of gaining it)



Implications

-Currency from fractional reserve banking is a promise to do work in the future. How much work is done determines the value of your currency.

-The number of currency units you "command" (size of your bank account) is not nearly as important as what value that currency brings you.



Problems

-Some people are stupid, and equate currency as a score. More currency means a higher score, even if that currency has greatly devalued itself. Poor economic decisions are the opposite of ruthless efficiency.

-The value of the currency is dynamic and the dissipation cycles are long compared to attention spans. Problems don't appear immediately, and humans don't take action until there is a problem. There is alot of intertia behind the misuse of this system, and it is easy to temporarily hide the misuse of this system. (eg: If a disipation cycle is 7 years long, correcting a problem using an inverss ratio will take 7 years... so from start to end, if someone is being a douche, it can take 14 years from the time a problem is noticed and corrected)



Ultimately, there is not really anything wrong with this monetary system itself. The problem is that the monetary system is being abused and people are disinterested.

But that is an entirely different discussion.