| >> Assets aren't zero sum because you can produce more cars, etc. I’d need to exchange other tangible assets (raw materials) and labour to produce the next car, I can’t just make a car, a tangible asset, by declaring a new one exists. I’m creating more value than the raw materials worth when i assemble them into a car - maybe the idea of value creation is what you’re digging at here and I’m misunderstanding? In either case it’s zero sum. I have some form of asset or I don’t. The value of an asset is not the price of its raw materials, it’s whatever i can convince someone it’s worth. But valuation is nothing to do with the zero sum notion of transferring ownership of assets. >> Money is zero sum … excluding central bank money and cash That’s a contradiction. It’s either zero sum or it’s not. But besides that it’s missing what zero sum means. The bank issuing a loan has provided you with value in the form of the loan funds but it hasn’t exchanged any tangible asset to provide you that money. It just created an asset from thin air (your loan is its new intangible asset). They can sell your loan to a pension fund but they they won’t own that asset anymore. You won’t have to repay 2 creditors if they sell your loan. There’s a complication when you spend your loan with a merchant banked by another bank. Your bank will now have to transfer reserves at the central bank from their account to the merchant’s bank’s account at the central bank. If they don’t have enough reserves to cover this transfer, the central bank will create reserves and lend them it at the base rate. >> Money being backed by debt It’s not backed by anything, it’s just a promise >> Of course that means there is no limit to how much money there is in the system In theory true but in practice people will stop accepting your money if you hyperinflate it |