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How The Multiplier Effect Works
How The Multiplier Effect Works
Deposit Multiplier or Credit Multiplier: magnifies small changes in bank deposits into changes in
the amount of outstanding credit and the money supply. For example, a bank receives a deposit of
$100,000, and the RESERVE REQUIREMENT is 20%. The bank is thus required to keep $20,000 in the
form of reserves. The remaining $80,000 becomes a loan, which is deposited in the borrowers bank.
When the borrowers bank sets aside the $16,000 required reserve out of the $80,000, $64,000 is
available for another loan and another deposit, and so on. Carried out to its theoretical limit, the
original deposit of $100,000 could expand into a total of $500,000 in deposits and $400,000 in
credit.
So where the deposits are concerned, they multiplied themselves five times over each month. In
respect to our IBOE with an initial deposit of $5,000,000.00 the multiplication process triggers
$25,000,000 in deposits or five times the monthly total for the next month. Here is how this may
potentially play out.
1
First month of deposits - 5,000,000
Second month of deposits - 25,000,000
Third month of deposits - 125,000,000
Fourth month of deposits - 625,000,000
Fifth month of deposits- 3,125,000,000
Sixth month of deposits- 15,625,000,000
After six months, disbursements begin. Leaving $10,000,000 on deposit at the bank, the rest of the
deposit of $15,615,000,000 / 20,000 = $780,750 will be distributed per certificate leaving
$1,219,250 outstanding balance due and payable to each certificate by the end of the twelfth
month.
Distribution total needed in the twelfth month to complete the $2,000,000 per year due and
payable to the certificate holders: $1,219,250 X 20,000 = $24,385,000,000.
A debit card from the multiplier bank will be issued to each participant for his/her daily
purchases. For large purchases like vehicles, homes, etc. the bank can either wire money directly
or issue an international cashier's check to an escrow or sellers business account.
Not more than $1,000 per day should be wired into anyones personal checking or savings account
in a bank that is under the Federal Reserve banking system better known as the trans-Atlantic
global monetary system. If you are a voluntary taxpayer, be careful in how you proceed. If you are
not a taxpayer, you are a wise person.
If you are interested in setting up a trust account exempting you from taxation, please email
judgenaidu@unseen.is for a native indigenous trust.
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