Why FNB offers ebucks on card transactions

FNBEver wondered why banks such as FNB are so eager to give you cash back on purchases you make with your debit or cheque cards?  Yes, there is an element of value-added going on to attract customers, but there’s more to it.  Murray Rothbard taught about this in the Mystery of Banking. In chapter 8, “Free Banking and the Limits on Bank Credit Inflation,” he explains:

There are other severe limits, moreover, upon inflationary
monetary expansion under free banking. One is the extent to
which people are willing to use bank notes and deposits. If creditors
and vendors insist on selling their goods or making loans in
gold or government paper and refuse to use banks, the extent of
bank credit will be extremely limited. If people in general have
the wise and prudent attitudes of many “primitive” tribesmen and
refuse to accept anything but hard gold coin in exchange, bank
money will not get under way or wreak inflationary havoc on the
economy.

The more banks can get you NOT to use physical note and coin, the greater ability they have to inflate the money supply. Inflating the money supply is why banking is such a lucrative business, banks are allowed to counterfeit Rands, under license from the Reserve Bank.  By leaving your cash with them and swiping your card as a means of payment, you give the banks leeway to inflate the money supply much more than they otherwise could have.  They are then able to steal real resources from hard-working and productive people in the economy.

Next time you’re at an ATM, keep this in mind and draw as much cash as your daily limit allows. Then tell your friends, and start a bank-run.

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