| > What assets? Defined as you would define them, the things most of us think about as liabilities (outstanding loans) are the same assets. Liabilities are money you owe someone else. Assets are money (and things) people owe you. You're playing word games with extremely precise words and trying to pretend that these words... don't mean what they mean. Its perfectly fine to owe $5 Billion to other people, if you yourself have $5 Billion owed to you. Assets and liabilities cancel each other out in all forms of modern accounting. > They can't print money, but they can certainly let me use the credit card they mailed to me, and they aren't digging around in the couch cushions for some coins so that they have that covered with "assets" as you contend above. Are you seriously trying to say that Costco doesn't get their money when you swipe a credit card and pay for your groceries? The banks that fund credit cards have huge amounts of cash on hand. They pay Costco _BEFORE_ you pay the credit card companies (especially if you keep the balance beyond the payment period), and that's only possible because they have huge reserves of cash. Beyond "just" an asset, like true cold-hard cash that they're transferring. Now the timing is a bit weird. Maybe credit cards pay in net 30. That's somewhat common. But if they have an asset (ex: a 30-day bond) with enough money coming in by day#30, then that's fine. The bond matures, the credit card gets the money on Day#30, the credit card company transfers it to Costco. Super-short bonds, such as 7-day, 30-day, or even 90-day bonds, are treated as near-cash for good reason. With industry pseudo-standard net30 deliveries of cash, a 30-day bond basically is as good as cash. |