> While the last seller for cash retains value, the buyer of something > like a CDO has exchanged money for near money. In a crisis like this > the near money simply disappears. Is this right (I'm no expert though I > hope to play one on TV)? > > Terry
This is a reasonably accurate description in my view, although I would not use the words "value" and "near" in this description. I would say, the buyer of the debt exchanged cash for credit. Both credit and cash are money, but credit may disappear if debt disappears, whereas cash does not. Cash may buy less or more in the future, depending on inflation/deflation, but it does not disappear. Sabri _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
