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To: Claude Cormier who wrote (100770)	8/12/2009 11:18:43 PM
From: russet	Read Replies (1) \| Respond to of 116555

The government interfered with the process in many ways. If you just looked at the financial system, absent the trillions in government spending, you would see the money supply generated by bank loans have depreciated and this has been reported by many articles in the media with stories of shrinking loans to consumers for cars, houses, liens of credit, credit cards, commercial loans etc. So C of GDP decreases but G of GDP inflates and the total money supply for the moment stays the same. But you asked why a foreclosure of a property owned by a financial institution could cause money supply to be reduced and I gave you the textbook theory. Now you tell me what you think the U.S. government will do to that same U.S. money supply if the Chinese and other nations convert more and more of their reserves of U.S. dollars into inventories of metals, food commodities and energy products and start asking for payment of exports into the U.S. market in a currency other than U.S. dollars :-)

To: Claude Cormier who wrote (100770)	8/13/2009 1:09:54 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 116555

What you're saying is, if someone owes you $10,000 and they die leaving you only $6,000 in their estate, your money supply is still $10,000 because they still haven't repaid you the missing $4,000. According to your math there's still the $4,000 out there that was spent AND the $4,000 owed to you by a dead person you'll never collect. So there is no $4,000 reduction in the money supply, only a $4,000 increase in the money supply when you first lent them the money - according to you. You can believe this if you wish, but it's not mathematically correct, nor does it make any sense. When your money is gone, it's gone, even though no one paid you back. .