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Eagle 3

Frontiersman, February 2007
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A Den of Thieves:
Cash Dollars In Circulation
Sam Aurelius Milam III
15x5 Page Background GIF ImageThis is the second article in a series of articles that I'm presenting in this newsletter.  The first article, A Den of Thieves:  Fractional Reserve Banking, appeared in the December 2006 issue.  The articles are based on my essay They Can Fool Too Many Of The People Too Much Of The Time.  Due to the limited amount of space in this newsletter, I'm eliminating from the articles a lot of material that's included in the essay.  However, copies of the essay are available upon request.  The essay is also available on Pharos.
15x5 Page Background GIF ImageI intended, when I began the essay, to prove that fractional reserve banking increases the number of cash dollars in circulation.  Early in the essay, I proved the opposite.  However, while I was working my way through the mechanics of fractional reserve banking, I discovered that fractional reserve banking doesn't really exist, if it ever did.  Beyond that, I found within the existing financial system a sinister potential.  Inflation is only one of its evils.  The thing that I least expected to discover but which ought to have been the most obvious from the very beginning is that none of it would be possible without the cooperation of the people.
15x5 Page Background GIF ImageIn these articles, I've illustrated the dynamics of fractional reserve banking with a model of the process of deposits, loans, and redeposits.  The model cycle is as follows:
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1. Some number of cash dollars, in circulation in the economy, is available for deposit in the bank.
2. The available cash dollars are deposited in the bank.
3. The required number of cash dollars is held in reserve by the bank.
4. The difference between the number of cash dollars deposited and the number of cash dollars held in reserve is loaned by the bank, as cash dollars, and again enters the economy.
5. The cash dollars loaned by the bank, circulating in the economy, are then available to be redeposited in the bank.
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15x5 Page Background GIF ImageA series of such cycles is an idealization of the process of fractional reserve banking as it would happen in a real fractional reserve banking system.  It illustrates the ideal performance to be expected from such a system.  In the essay upon which these articles are based, I used a variety of examples to investigate the consequences of several such cycles.  Those examples are shown in detail in appendix 1 of the essay.  The various tables used throughout these articles are based on those examples.  The quantities in appendix 1 of the essay, and in the various tables and figures shown in the essay, can be calculated by equations that will yield the accumulated total for any combination of parameters.  Appendix 2 of the essay contains examples of such equations, as well as their derivations.  Those equations are academically correct and ought to impress my critics but there are easier ways to do the calculations.  I used a Hewlett-Packard HP-25 programmable calculator.  The calculator programs are shown in Appendix 3 of the essay.  None of the appendices or figures shown in the essay are presented in these articles.  If you're interested in seeing them, then you can request a printed copy of the article or you can view it on Pharos.
15x5 Page Background GIF ImageWhen I began the essay, I believed that cycles of fractional reserve deposits and loans greatly increase the number of cash dollars in circulation, thereby contributing to inflation.  I'd heard that claim from various folks who believed it to be one of the banking system's evils.  It seemed reasonable and I believed it.  However, Table 1 shows that I was mistaken.  The number of cash dollars placed into circula-

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Please use the enclosed envelope to send a contribution.  I prefer cash.  For checks or money orders, please inquire.
For PayPal payments, use editor@frontiersman.my3website.net.

February 2007 Frontiersman, 1510 North 22nd Drive, Show Low, Arizona  85901
editor@frontiersman.my3website.net
 Also see Pharos at http://www.pharos.my3website.net.
              Page 1
 

 
 
 
Tables
tion by fractional reserve banking, in the example, will never be equal to the initial deposit, by which cash dollars were removed from circulation.  Thus, the net effect of fractional reserve banking is to remove cash dollars from circulation, not to add cash dollars to circulation.  That conclusion is true for all variations in the parameters except for the situation in which no cash is redeposited and no cash is held on reserve.  Those conditions are, of course, the same as not having fractional reserve banking at all.
Box 1
15x5 Page Background GIF ImageTable 2 shows that the greater the fraction of cash dollars redeposited, the greater the tendency for cash dollars to be removed from circulation.  That's so logical that I wonder why I needed a table to make me realize it.
Box 2
15x5 Page Background GIF ImageTable 3 shows that the number of cash dollars in circulation varies inversely with the fraction held on reserve.  That is, the fewer cash dollars the bank holds on reserve the more cash dollars will be in circulation.
Box 3
15x5 Page Background GIF ImageIt's apparent that fractional reserve banking doesn't increase the number of cash dollars in circulation.  However, neither does it remove cash dollars from circulation.  Deposits remove cash dollars from circulation, which would be the case for any banking system, not just for a fractional reserve banking system.  Thus, it isn't the bank or its policies, but the people and their behavior, who are responsible for the removal of cash dollars from circulation.  Fractional reserve banking puts a few of those dollars back into circulation again.10x5 Page Background GIF ImageGun

Stray Thoughts
Sam Aurelius Milam III
15x5 Page Background GIF ImageNe'er The Twain Should Meet People live in houses.  Animals belong in barns or in pastures.
15x5 Page Background GIF ImageFree Speech In this country, we have complete freedom of speech, just so long as what we say doesn't offend anybody or violate any legislation or any administration policies.
15x5 Page Background GIF ImageFree Thought In this country, we have complete freedom of thought, just so long as we don't say what we're thinking.
15x5 Page Background GIF ImageBetter Left Undone It's likely that the cost of attacks by so-called terrorists would never be as large as the cost of the so-called War on Terror.  Maybe we should just rebuild the damage that they do and let it go at that.
15x5 Page Background GIF ImageLiberty Toilet Paper U.S. flag patterns.
15x5 Page Background GIF ImageUnexpected Benefit The nice thing about walking your dog is that people won't know that you're talking to yourself.10x5 Page Background GIF ImageGun

Please use the enclosed envelope to send a contribution.  I prefer cash.  For checks or money orders, please inquire.
For PayPal payments, use editor@frontiersman.my3website.net.

Page 2  Frontiersman, 1510 North 22nd Drive, Show Low, Arizona  85901
editor@frontiersman.my3website.net
 Also see Pharos at http://www.pharos.my3website.net.
 February 2007
 

 
 
 
Letter to the Editor
Dear Sam.
15x5 Page Background GIF Image.... I've received the Frontiersman, Jan 07, thank you.
15x5 Page Background GIF Image2 quick comments:
15x5 Page Background GIF ImageYour response to Millie, p 3:  Apology not necessary.  Even going by memory, I can't imagine your comment of Buck going on sabbatical being misinterpreted to mean you.  Actually, I'd had a feeling for a while you were running thin on Buck's quips.  (I had a notion to send you a few ideas, in passing, but figured you wanted to source your own, and I quickly forget such things I don't write down, so now they are mentally vaporized away).  Anyway, the intent of your message was unmistakable to me.
15x5 Page Background GIF ImageComment on CHANGING TIMES from Steve of Fremont, p. 4:  The comparison is a great idea, but the writer is off on his timing.  If I may add the corrective information:  1956:  good, agreed.  But what he submitted as 2006, was about 1993.  Here is the correct version for 2006:  The police are called and of course, arrive with their protective SWAT team.  Immediately they draw their guns (of course) toward the two scufflers, and 6 of them open fire on Mark, killing him instantly (even though Johnny started it).  The shooters are given special commendation medals for bravery in the face of danger, and no charges are pressed against the police (of course) because it appeared he had something in his hand which turned out to be his fingers "suspiciously concealed" by his thumb.  While Johnny is recovering in the jail hospital from his 6 gunshot wounds, he is served the charges of "first degree murder" for the death of Mark, having been (of course) the proximate cause of the death.  He is (of course) convicted, doing a 50-years to life sentence in prison, with enhancements for the six blazing SWAT team guns used to commit the "murder."  What will 2008 hold in store?
15x5 Page Background GIF ImageOne other thing that occurred to me:  You seem to be statistician-oriented somewhat.  Maybe ...  you also might have some added thought on this.  In your opinion, what are the statistical chances in the year 1983, (location withheld), of a two juror pools, 100+ people, selected for jury duty, and coincidently NOT ONE OF THEM being a gun owner?  (I'd say, ZERO chance).  This is what convicted me.  Your comments please?  Anywhere you know of I can get real statistics on this?  I know there was juror tampering at this level, but nothing to prove it with, yet ....
an inmate
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15x5 Page Background GIF ImageI don't know the likelihood that there would be any gun owners in the jury pool.  Considering the anti-gun brainwashing in recent decades, that probability might be lower than either of us would like to believe.  Here's another question that might be even more important.  What's the likelihood of somebody in the jury pool who knows the difference between a right and a privilege?  I don't know where to get valid statistics on either question.
editor
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Continuing Education Courses For Women
Original Source Unknown.  Forwarded by Don G.
1. Silence:  The Final Frontier, Where No Woman Has Gone Before
2. The Undiscovered Side of Banking:  Deposits
3. Combating the Imelda Marcos Syndrome:  You Do Not Need New Shoes Every Day.
4. Parties:  Going Without New Clothes
5. Man Management:  Discover How Minor Household Chores Can Wait Until After the Game.
6. Bathroom Etiquette I:  Men Need Space in the Bathroom Cabinet Too.
7. Bathroom Etiquette II:  His Razor Is His.
8. Valuation:  Just Because It's Not Important to You ....
9. Communication Skills I:  Tears The Last Resort, Not the First Resort
10. Driving a Car Safely:  A Skill You CAN Acquire 
11. Telephone Skills:  How to Hang Up
12. Water Retention:  Fact or Fat
13. Cooking I:  Bringing Back the Bacon, Eggs and Butter
14. Compliments:  Accepting Them Gracefully
15. PMS:  Your Problem, Not His
16. Dancing:  Why Men Don't Like To
17. Household Dust:  A Harmless Natural Occurrence That Only Women Notice
18. Integrating Your Laundry:  Washing It All Together 
19. Oil and Gas:  Your Car Needs Both.
20. TV Remotes:  For Men Only10x5 Page Background GIF ImageInfinity Symbol

Please use the enclosed envelope to send a contribution.  I prefer cash.  For checks or money orders, please inquire.
For PayPal payments, use editor@frontiersman.my3website.net.

February 2007 Frontiersman, 1510 North 22nd Drive, Show Low, Arizona  85901
editor@frontiersman.my3website.net
 Also see Pharos at http://www.pharos.my3website.net.
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Frontiersman
1510 North 22nd Drive
Show Low, Arizona   85901 
 
 
 
 
 
The well-being of a baby does NOT justify the enslavement of a man.
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Flag
 
 


Acknowledgments
15x5 Page Background GIF ImageMy thanks to the following:  Sir James the Bold;  SantaClara Bob;  Lady Jan the Voluptuous;  Lord Jeffrey the Studious;  and Sir Donald the Elusive.
editor


Blame
Original Source Unknown.  Forwarded by Don G.
If an employee at a restaurant cuts his finger off while slicing salami, he blames the restaurant.
If you smoke three packs a day for 40 years and then die of lung cancer, your family blames the tobacco company.10x5 Page Background GIF ImageInfinity Symbol
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Changing Times
Original Source Unknown.  Forwarded by Steve, of Fremont, California.
15x5 Page Background GIF ImageScenario:  Jack pulls into the school parking lot with a rifle in the gun rack of his pickup truck.
15x5 Page Background GIF Image1956:  Jack and the football coach go out to the parking lot at lunch and compare Jack's rifle to the coach's rifle.  That's why Jack brought it to school.  They decide to go hunting together.
15x5 Page Background GIF Image2006:  The school goes into emergency lock down.  The FBI is called.  Jack is hauled off to jail and never sees either his pickup truck or his rifle again.  Counselors are called in for traumatized students and teachers.10x5 Page Background GIF ImageInfinity Symbol


Frontiersman
15x5 Page Background GIF ImageCancellations If you don't want to keep receiving this newsletter, print REFUSED, RETURN TO SENDER above your name and address, cross out your name and address, and return the newsletter.  When I receive it, I'll terminate your subscription.  You can also cancel by letter, e-mail, carrier pigeon, or any other method that gets the message to me.
15x5 Page Background GIF ImageBack Issues Back issues or extra copies of this newsletter are available upon request.
15x5 Page Background GIF ImageReprint Policy Permission is hereby granted to reproduce this newsletter in its entirety or to reproduce material from it, provided that the reproduction is accurate and that proper credit is given.  Please note that I do not have the authority to give permission to reprint material that I have reprinted from other sources.  For that permission, you must go to the original source.  I would appreciate receiving a courtesy copy of any document or publication in which you reprint my material.
15x5 Page Background GIF ImageSubmissions I solicit letters, articles, and cartoons for the newsletter, but I don't pay for them.  Short items are more likely to be printed.  I suggest that letters and articles be shorter than 500 words, but that's flexible depending on space available and the content of the piece.  I give credit for all items printed unless the author specifies otherwise.
15x5 Page Background GIF ImagePayment This newsletter isn't for sale.  If you care to make a voluntary contribution, you may do so.  The continued existence of the newsletter will depend, in part, on such contributions.  I prefer cash or U.S. postage stamps.  For checks or money orders, please inquire.  For PayPal payments, use editor@frontiersman.my3website.net.  I don't accept anything that requires me to provide ID to receive it.  In case anybody is curious, I also accept gold, silver, platinum, etc.
Sam Aurelius Milam III, editor

Please use the enclosed envelope to send a contribution.  I prefer cash.  For checks or money orders, please inquire.
For PayPal payments, use editor@frontiersman.my3website.net.

Page 4  Frontiersman, 1510 North 22nd Drive, Show Low, Arizona  85901
editor@frontiersman.my3website.net
 Also see Pharos at http://www.pharos.my3website.net.
 February 2007
 
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