[barelystayingsane]

Becker says that frequent kiting may result in a high level of deposits coupled with a low average balance. I understand the high level of deposits, but I’m confused about the low average balance. Can someone explain that to me? I thought the whole point of kiting was to basically double-count cash and increase balance.

Thanks!

[gaucho]

I'm not sure I completely understand the question but here's what I think. If “average balance” is an average balance over time, like say a year, then this makes sense. Kiting momentarily augments the balance but if you look at the average balance throughout the year it will be more accurate and lower than whatever the high “kited” number is. By taking an average the kiting is negated.

[Author]

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