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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (251666)	6/3/2010 5:31:45 PM
From: neolib	Read Replies (1) \| Respond to of 306849

the law will allow me to keep my home when i pay with federal reserve notes. i can lose my house trying to pay with receivable receipts. that isn't a trivial difference. You are not doing the accounting correctly. Lets say you have some obligation you need to pay. If you write a new IOU (issue your own money on whatever terms are agreed to) this is new debt. You are comparing it to already having currency with which to pay. Not fair! Apples to Apples, you need to go acquire the federal reserve notes, which would involve you getting a loan from a bank (and to keep things equal lets say this was created money as well!) then you pay the obligation with currency instead of an IOU. But you now owe the bank who can still get your house. You have to keep both examples equal from a debt perspective, then the comparison is between the types of currency, private IOU vs federal currency. Same amount of debt in both cases, so in reality there is equal IOU's. Its just that in one case, your IOU can circulate in the economy while in the other case the currency circulates in the economy. Thats why private IOUs are money. Note that the debt that sits in the bank is not money!