Fractional Reserve Banking

[JD1stTimer]

I have created this chart showing the effect of FRB on money. It's the best of my understanding and I am no economist, so anyone who knows more about it and sees a major error in concept or a bad math please let me know.. (I'm terrible at math). Also in the second example the guy could borrow the money, but he still wouldn't suffer the effect of inflation, and the bank would only make revenue of P^5 from the transaction instead of P^42.5 (P^ is the currency symbol. You'll understand when you look at my chart.) That is why banks will never let fractional reserve banking go away as long as they control it, and why Ron Paul says the Federal Reserve is killing us slowly. I think the logic is undeniable. If you understand this and agree, please share it and explain it as much as possible to anyone who doesn't profit off of banking.

[MistaGanja]

its kinda of confusing but somewhat makes sense to my extremely non-economic 17 year old mind. Nice work man.

My question is why cant i barrow the FF from a friend in this banking system??????

[JD1stTimer]

Yes, you can! Many people just simply aren't willing to go through the extra hassles of it. How many people do you know who put money aside from month to month saving up for their larger purchases, or who have a little lump of cash in the bank to draw from when their furnace breaks down in the winter? Where I live it's very rare, but that's what people need to do in order to not get sucked in. You are young, at 17 if you keep your wits, and it looks like you're starting well by thinking about these issues, you will avoid the traps your friends will fall into, and you will see the benefits in your bank accounts before too long at all. :thumbsup: