Thursday, December 15, 2016

The complete sand box banking system

Modeling the system wealth all risk priced, and all coin conserved, secure end point, and transaction costs zero. So, no worry abut cheating or double counting. W\hat does the banking system look like?
ell, take Pit.boss=S&L, and we set the rule to drive bit error to zero over the significant 5% of the bid/ask.  In other words, if the 5% most infrequent bids were a repeating sequence, then bit error gets closer to zero over two events. So, the pit boss allows a 5% bit error risk.

Then we let the trading pit spawn.
Then we release it.
Now, whatever the spawn, they all use the same S&L rule,.  The coins are interchangeable among themselves. We presume the spawn and unspawn occur to maintain the 5% rule, typically.  But the 5% rule is loose, no one will dump a home price for 15 years on that.  But we can see a lot of people using it for mall shopping.  Then prices may vary 5% over two years, but the outstanding is limited about zero.  Banking contraction and expansion all occur by spawn and unaspawm.  In the aggregate, the total outstanding bits are bound, and matched to economic activity, within %.

What  is yhe unstable moment? When a bunch of pits unspawn, all while they are in the slightly negative state, and cause a collapse.  Likely? Just thought of the problem, but why would they all have sudden loan withdraw, and fill up the deposit slots?

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