CIPL in the Media
Articles filed under category economics
Ruddbank
David French | 24/03/2009 11:00:14 AM
This article was published in Capricorn Investment Partners Limited's March 2009 Newsletter
The government brings out the chequebook as growth slows. This response may very well be described as the single largest fiscal policy stimulus in Australian history.
How banks work
David French | 2/03/2009 12:33:08 PM
This article was originally published in The Morning Bulletin as "Dogma debates show the better times returning" on 7th February 2009.
How does a bank work? Say a bank attracts a $1.00 deposit. It might keep $0.10 in reserve and lend out the other $0.90. That $0.90 goes round in the economy and is eventually re-deposited in the banking system. Of that $0.90 the banks keep $0.09 in reserve, and lend out $0.81. If nothing adverse happens, this goes on and on until there is no more to lend.