The Free Market Center
The Free Market Center
I have provided this graphic for those who appreciate complete detail. It shows the tables that I used to construct the charts that appear for model #3, which depicts a successful loan repayment in a fractional reserve banking system.
| Money Transactions | ||||||
| Grower/Seller | Seed Dealer | Lender/Bank | Deposit Liabilities | |||
| Beginning Amounts | $0 | $2,250 | $1,250 | $3,500 | ||
| Grower Borrows To Buy Seed | $1,000 | $1,000 | ||||
| Grower Buys Seed From Dealer | ($1,000) | $1,000 | $0 | |||
| Grower Sells Seed To Dealer | $1,500 | ($1,500) | $0 | |||
| Grower Repays Bank Loan | ($1,175) | $175 | ($1,000) | |||
| Money Balances | ||||||
| Grower's Money |
Dealer's Money |
Bank's Money |
Total Money |
Deposit Liabilities | ||
| Beginning Amounts | $0 | $2,250 | $1,250 | $3,500 | $3,500 | |
| Grower Borrows To Buy Seed | $1,000 | $2,250 | $1,250 | $4,500 | $4,500 | |
| Grower Buys Seed From Dealer | $0 | $3,250 | $1,250 | $4,500 | $4,500 | |
| Grower Sells Seed To Dealer | $1,500 | $1,750 | $1,250 | $4,500 | $4,500 | |
| Grower Repays Bank Loan | $325 | $1,750 | $1,425 | $3,500 | $3,500 | |
| Corn Seed Balances & Transactions | ||||||
| Corn Seed Balances | Grower's Corn Seed Transactions | |||||
| Grower's Corn Seed |
Dealer's Corn Seed |
Net Quantity Grown ( Bushels) |
Quantity Bought ( Bushels) |
Quantity Sold ( Bushels) |
Price ( ($/Bushel) |
|
| Beginning Amounts | 0 BU | 1200 BU | ||||
| Grower Borrows To Buy Seed | 0 BU | 1200 BU | ||||
| Grower Buys Seed From Dealer | 500 BU | 700 BU | 500 BU | $2.00 | ||
| Grower Sells Seed To Dealer | 900 BU | 1500 BU | 1200 BU | 800 BU | $1.88 | |
| Grower Repays Bank Loan | 900 BU | 1500 BU | ||||
The top part of this table shows the money transactions between the grower, the seed dealer, and the lender/bank.
The middle section of the table show the money balances at the conclusion of each of these transactions.
The bottom section shows the balances and transactions in terms of corn seed.