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To: Valuepro who wrote (61918)	10/24/2008 6:31:01 PM
From: tyc:>	Read Replies (1) \| Respond to of 78410

>>- i.e., wealth (100 dollars + 400 dollars in loans), yet only the first 100 dollar deposit exists to support the total indicated wealth of 500 dollars I not sure* I agree with your suggestion that $100 deposit allows the creation of $500, the original $100 plus $400 of "paper". My understanding is that the original $100 deposit allows the lending of only (say) $80. However that $80 loan remains in the banking system because it is redeposited after use, and thus becomes another deposit which allows another loan of something less. Each deposit is the equal of the other. *(Come to think of it, I'm not sure of anything anymore, except that I am often wrong).

To: Valuepro who wrote (61918)	10/24/2008 6:42:54 PM
From: benwood	Read Replies (1) \| Respond to 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.