In this appendix I have provided a complete set of models to show the effect that bank loans have on the money supply under four different scenarios—two different outcomes for the grower under two different banking models. (I used model #3 as the main model in this presentation.)

The following outline provides links to an introduction to these models and to the models themselves. (You might want to click through these pages in sequence the first time you view them.)

Introduction to Loan Models

A brief introduction to the models developed for this presentation.

100% Reserve Banking System

Model #1

Grower pays loan in 100% Reserve Banking System.

Model #2

Grower defaults on loan in 100% Reserve Banking System.

Fractional Reserve Banking System

Model #3

Grower pays loan in Fractional Reserve Banking System.

Model #4

Grower defaults on loan in Fractional Reserve Banking System.