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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: dalroi who wrote (61892)	10/23/2008 3:40:31 PM
From: Valuepro	Read Replies (1) of 78410

Very interesting and quite astute question, Stefaan. The answer is that money is never destroyed, it just changes hands. If you buy a house, and default on the loan, the seller of the house still has the money that was lent, along with the down payment. It would be correct to note that you and the bank have lost money, but the money involved in the transaction did not go away. The seller has it. The same is true of other financial loses, though the details can sometime get more sticky, as in derivatives The point is, all the money the Fed and the banks have ever created is still in the system. Hence, the dollar has lost 96 percent of it's value (thanks to our having fiat, instead of commodity money, and a fractional reserve banking system).

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