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RE: The Mathematics of Fractional Reserve Banking

in #mathematics8 years ago (edited)

Yes. The interest on loans makes it so that the total sum doesn't add up to 0 and as such is not a zero-sum game. Assuming everyone is honest and pays back the banks for any loans, they always have a net gain (minus losses paid to employees).

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and interest paid on deposits.

Its deeply tragic, i know. In a perfect world, banks would just operate at a loss. then again, why just banks? grocery stores could operate the same way. they could sell food for exactly the amount of money that they bought it for, pay employees and rent and other expenses out of pocket and operate at a loss too.

oh to live in such a nirvana.

No, i mistake your statement that the banking industry is crooked as an indictment of the banking industry.

You have made no observation of fact. You created a hypothetical scenario where the money supply is multiplied by FR banking that was based on a misunderstanding of how banks lend money to consumers, businesses and oneanother.

And there's no talking you out of it, because you think accounting is a scam.

Its really a shame that posts like this end up on the front page (and will be pinned there for weeks now)...

I've never seen any academic claim that asking a question is the same as making a statement.

I reject your hypothesis that I made any blanket claim about the banking industry being corrupt.

All I did was ask if others are tired of it being corrupt.

That question does not necessarily preclude the assumption that I think the institution is corrupt, but rather anyone who answers the question in the affirmative, i.e. "Yes. I am tired of the corrupt banking institutions."

I never stated such a claim.

I think you mistake my observation of facts, and how they relate in an algebraic-geometric fashion to how reserve requirements operate, as an indictment on the banking industry.