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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: Valuepro who wrote (61918)10/24/2008 6:42:54 PM
From: benwood  Read Replies (1) of 78410
 
You've created the simple transaction to prove your point about the zero sum game, but that is just the inside transaction of a much larger picture. The stocks are assets held by many, often primarily as a byproduct of credit, so as the asset values decline, the zero sum game shows that people passed around the dollars, but at some point because of declining asset prices, margin calls or loan calls are made and dollars are used to cancel out debts. Voila, the dollars have gone into the same vapor from whence they came.

So to combat that and to reward the friends who created the deflationary (deleveraging) cycle, money is printed up and handed to them, and the new debt is held by the public.

So in exchange for private wealth which evaporated, we get public debt. Nice trick. And along with the game of shifting wealth around, just a few gigantic preferred banks emerge ready to rule the country, er, Wall Street.
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