Tackling South African Banking malpractices
There are problems in the banking system due to banking malpractices. Most banks borrow short and lend long. If there is a run on the bank and people want their money, but the bank has lent it out on mortgages, then it will not have the cash to return to the depositors. This reserve ratio is often confused with the fractional reserve, which is a different thing.
The other thing they can use is securitization, in which the bank takes your mortgage and bundles it up with other mortgages and make a company out of it. They create a security out of it, i.e. a bond, which is an investment.
The way banks operate in South Africa is wrong because the way they re-sell mortgages amounts to malpractice. They can cede that mortgage to anyone else without your permission, which means the new owner can come and repossess your home. But one good thing is it can get the bank out of the bank run problem because it has access to these bonds. In Denmark the banks tell you when they sell your bond, as does SA Home Loans in South Africa.
We need to change the boom-bust cycle and try to keep the money supply flat. For example there was the Tulip Bubble in Amsterdam where you could even buy a house for one tulip. Problems occur with increases in the money supply.
Bitcoins are a new thing which is not controlled by anyone but by a programme which ensures that the supply remains the same. So it is an alternative currency, although it fluctuates wildly. So we are moving out of the era where the central banks control the money supply, which is both a good and a bad thing.