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I could maybe understand the argument that fractional reserve banking is fraud, if it weren't for the fact that deposits are legally required to be insured by the bank.

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In 1974, FDIC insurance backed up to $100,000, or almost three median new houses sold that year. Now, it is $250,000, or just a little over half the median price of a new home. https://fred.stlouisfed.org/series/MSPNHSUS

The value of that insurance has gone down significantly over time because of inflation.

That does not actually indicate anything about the insurance limit not matching inflation because housing prices are not necessarily flat. In fact they are not. However, the fdic insurance limit is indeed worth less now, but most people don’t even have $5,000 in the bank. The mean bank account balance is $40,000 according to a quick Google search.

This is all true, however I don't think very many people keep $100,000, let alone $250,000 in their bank account. There are far more lucrative places to park your money.

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