The Return of the Chief Assistant Head Designer

[From Bill Williams 18 February 2004 6:20 PM CST]

[From Rick Marken (2004.02.18.1430)]

> Bill Powers (2004.02.17.1135 MST)]

>> Rick Marken (2004.02.17.0830)--

> All money lent is immediately put on deposit
> (even if checks are written), so the aggregate bank's
> deposits increase by the same amount that it lends.

>> I don't believe this is the case. Linda said
>> that the money lent cannot be counted as an asset
>> against which more loans are made.

Now, I see new possiblities, the Head Designer and the Chief Assistant Head
Designer have a mole. And, the mole is planted in the house keeping
department of the Federal Reserve System. Now, the plot thickens, or is it
that it coagulates? I think we are coming closer to identifying just where
the hole is through which the leakages take place-- it must be in those big
federal reserve banks. I thought the rconditioned refrigerators were going
to weapons of mass distruction. But, really what they must be for is to plug
the holes through which all the money is leaking away.

You still get

>> quite a bit of money creation by loaning against
>> deposits.

> But the money lent is then spent, by writing checks
> to other firms, who deposit them in their own accounts
> in the composite bank -- and those deposits can be
> the basis for more loans.

Good point!!

Yes. Very good point.!!!!! Everytime a sophmore thinks it up, we put an
extra big gold star in the grade book.

At the aggregate level there definitely would be a multiplier

effect. In an aggregate analysis, I think this could be handled by saying

L<= K * (S-r*S)

Where L is the amount of money loaned for investment, S is aggregate

saving,

r*S is the reserve requirement and K is a model parameter that is an
estimate of the multiplier effect. The model would not be able to loan

more

than K * (S-r*S) to the aggregate producer for investment.

Please. Take a peek at a money and banking text. Sturgeon is still in
intensive care.

>> Too bad. I guess CSGNet has to be considered a failed
>> endeavor. I'll keep in touch with you about the status
>> of my modeling efforts the old fashioned way: by direct mail.

> Don't give up yet. The secret is not getting dragged
> into dog-fights.

I do think they may have really gotten ahold of a pair of Princess Lady
Diana's sunglasses-- they never could have figured this out on their own.

And, Yes,. When Snips is around you surely don't want to get into a dog
fight.

It is, in fact, possible to hit the

> delete key, or block spam, or do all those things
> that eliminate irrelevancies.

Try not to do this when Micro-Klepto company is watching. Your computer may
disappear.

Here we have the "final solution" if you have the will to stick to it. But,
I don't think that this is going to be possible when the sequel to "running
through the Forest Naked" is finally released as a move.

All right, I'll give it a try.

That's the spirit. But, try to keep in mind that economics isn't for the
"faint hearted"

Whatever would I do without my favorite punching bag.

Bill Williams