It is the job of central banks to regulate the economy, one part of this is increasing or decreasing the money supply.
In days gone by, if inflation got too high, the central bank (The Fed, The Bank of England, etc.) will decrease the money supply which usually has the effect of decreasing inflation as less money means less spending.
Inversely after the 2007/9 crash, to increase the money supply the central banks decreased interest rates, to almost zero, and most or many central banks still have just above zero rates today, thus other methods of increasing the money supply have become more mainstream since the 2008 crash.
Investopedia.com , FederalReserve.gov , Wikipedia.org .
Note that we await a Nobel ranked economist to word this next point, my presentation is just giving the basic idea.
In Fractional Reserve Banking, or as I used to say; The RRT (Reserve Rate Technique) banks are required to hold only a fraction of the deposit, often 10%.
Of the money deposited the bank can lend out 90%, if that 90% was in turn put in another bank, that bank could do the same and see an increase to the money supply of 90% of 90% being 81% added to the original 90% = 171% increase to the money supply. If the process happened again it would add another 72.9%, so now the amount of money in circulation is 171% + 72.9% = 243.9%, and if we went as far as we could we would see an increase in the money supply close to 900%. This process is not dissimilar to how the Γfficiency and Εpin work in Ε -ΕΓΕβ’ where Γ creates the 90% and Εpin forces the re-spending.
I'm going to go out on a limb here because I've not heard this hypothesize from others, this quality of US banking, plus quantitative easing, derivatives, inflation manipulation, plus all other methods used to increase the money supply over the past two-hundred-years, may have increased the money supply in the USA by a magnitude, from $2.9 trillion (like Great Britain today) to the $20.9 trillion the World Bank reports for the USA in 2020.
Exact figures aside the USA's ability and execution of various methods of increasing the money supply on a macro scale has worked.
So consider this, if various ways of increasing the money supply may add a magnitude to US liquidity today, then itβs perfectly reasonable that Ε -ΕΓΕβ’ - the next and last mover in increasing money supply can increase the money supply and so GDP of any country it assists, and to coin a phrase - move Malawi from 'zero to one' percent of GDP.
Equally appealing is that Ε -ΕΓΕβ’ is a lot safer than Fractional Reserve Banking, because in Fractional Reserve Banking the 10% or less (now its apparently zero), held by banks, creates the environment for a bank run if more than 10% of customers want their money back at the same time.
Ε -ΕΓΕβ’ on the other hand is fundamentally different because the money in circulation never leaves the bank.
To understand this, we need to bring in one of the underlying assumptions: Network Credits.
Network credits are simple - they are essentially gift-vouchers for an individual store, or service which have a 'must spend by date'.
One network credit is worth one US dollar.
Essentially network credits are quantized, they can be counted, we will always know where each network credit is. If there are $100 billion network credits in circulation, the network central bank must have all $100 billion US dollars in its vault, or more often US treasuries, which are bonds that pay about 1.5% percent interest each year.
So now consider the process.
Company 1 spends 90 to 99.5% of all its network credits on its personnel, municipal personnel, services and other companies in the same network, then Technology 2. The TBSβ’ (Total Business Systems) immediately re-spends as many network credits as it can, in the same way, all 2048 companies must spend all their network credits before the next Εpin. These exchanges are lightning-fast, unusually the whole process will take just a few nanoseconds.
However, if you were to take a snapshot in time, you would find the money in one place, or another, companies will either have money or they will have bought materials and paid staff who will go on make money before the beginning of the next Εpin.
The result is there is no point when the companies are credited with having more money than is sitting in the vault of the central bank.
So if the music stopped, and everyone who was supposed to have money had their money, there would not be a line of other companies waiting for their money, there cannot be a bank run with this formulation of Ε -ΕΓΕβ’ - ΓL aside, the money never leaves the central bank.
This is best presented in the unscripted History 2 video, my favourite S-RES video includes trade and takes Malawi from zero to one percent of GDP 29 years earlier in 2051.
Plus it battles 15 years of simulated recessions and a depression in which all world trade stops, and yet just by good management of Ε and adjusting Γ and Ε the network increases its cash flow every year.
Ad Libbed (27.20 Minutes) (27th Dec 2018)
There is a very detailed program called The Sienna Equilibrium that maps out company-to-company spending, I paused this work a couple of months ago to bring you www.S-World.org. I shall return to The Sienna Equilibrium once this website is completed and I have finally sent the presentation to Erin Gleason Lane, Lauren Gross and Peter Thiel @Founders Fund.