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To: Pelham; Toddsterpatriot
This one?

The one that shows a 10% reserve requirement magically turning a $100 deposit into a hair less than $1000?

I get it. Would you 'splain that to the Toddster for me?

I'd do it myself, but clearly my teaching skills aren't up to the challenge.

164 posted on 04/02/2008 4:49:16 PM PDT by null and void (It's 3 AM, do you know where Hillary is? Does she know where Bill is? Does Bill know what 'is' is?)
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To: null and void; groanup
Table:[7] Fractional-Reserve Lending Cycled 10 times with a 20 percent reserve rate (sources: The Principle of Multiple Deposit Creation[8], Federal Reserve Bank of New York[9], Bank for International Settlements[4])
individual bank amount deposited amount lent out reserves
A 100 80 20
B 80 64 16
C 64 51.20 12.80
D 51.20 40.96 10.24
E 40.96 32.77 8.19
F 32.77 26.21 6.55
G 26.21 20.97 5.24
H 20.97 16.78 4.19
I 16.78 13.42 3.36
J 13.42 10.74 2.68
K 10.74




total reserves:



89.26

total amount deposited: total amount lent out: total reserves + last amount deposited:

457.05 357.05 100





commercial bank money created + central bank money: commercial bank money created: central bank money:

457.05 357.05 100

If you can follow the math, you'll see that subtracting total loans from total deposits gives you the reserves.

In your bank example, deposits are $10,000 loans are $100,000 and reserves are $10,000.

Let me know how you managed to make $10,000 - $100,000 = $10,000.

Do you work for the government? LOL!

I'd do it myself, but clearly my teaching skills aren't up to the challenge.

Your thinking skills need some help too. LOL!

165 posted on 04/02/2008 5:07:33 PM PDT by Toddsterpatriot (Why are doom and gloomers (and liberals) so bad at math?)
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