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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: benwood who wrote (61920)10/25/2008 2:19:25 AM
From: Valuepro  Read Replies (1) of 78410
 
I see what you are saying, but let me give an example of what I mean about money not being capable of being destroyed.

If we had a gold-based monetary system, and one ounce of gold were deposited in a fractional reserve banking system, that one ounce forms the basis of a deposit pyramid and newly created paper money from a stream of small loans and lesser deposits. If the bank fails, one ounce of gold remains - it can't be destroyed -, although the paper wealth is gone.

In the current system, the government can print more money to help with the loss of wealth, but all the dollars it ever printed ARE STILL IN THE SYSTEM. They are not destroyed.
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