[e-gold-list] Re: Return to gold standard

[Patrick Chkoreff]

SnowDog wrote

That's not fractional reserve banking, (nor any kind of banking that I've
ever heard). In fractional reserve banking, you take in deposits, and then
loan-out 90% of those deposits, (say). The borrowers deposit the money in a
bank, (either same bank, or another bank), allowing THAT bank to loan-out
90% of the redeposited money, etcetera... Pretty soon, you have numerous
multiples of actual deposited money, held in various accounts.

DOH! Yeah, I messed up big time. Strange, since I'm the same guy who posted a full description of this process with balance sheets and everything last June, showing how with an 8% reserve ratio yields a money multiplier of 12.5, turning a $1000 into $12,500 when it's lent out to infinity.

So basically, you're right, and I knew better. But still, something seems fundamentally different when you apply the process to e-gold accounts, but I may be mistaken there too. I'll figure it out.

-- Patrick
http://fexl.com


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