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Old 08-05-2011, 10:11 AM   #76 (permalink)
CheeseForSteeze
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Quote:
Originally Posted by Ratsch-Bumm View Post
I would name it catalyst or inhibitor. It really pushes the accelerator of funds multiplication, getting ten-fifteen times larger sums which is false.
Yes, I would agree, since fractional reserve systems aren't likely to undergo spontaneous manipulation to achieve certain economic milestones in a centrally planned system.

And yes, this is because the effect of changing the reserve requirement is quite dramatic. As you point out, it's exponentional in nature because commercial money leads to the creation of additional commercial money.
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