This simply defies logic. If the new currency has no value, it wouldn't be created, since it would then serve no valuable purpose. If it has value, then that value didn't appear out of the blue. It was stolen from the value of preexisting currency units. Had it not been created, what would have been sucked into the black holes you describe? Pre-existing money is the answer.
I never said it never had any value I said that it no longer exists.
It was used to cancel out an existing negative on the balance sheets of the major banks and those holding overpriced securities manufactured in the housing bubble. It was used to PREVENT a rise in currency values as deflation would have dictated.
What would have been sucked into the black hole in it's place? Every major bank and MBSs securities holder in America. One hell of a lot of personal balance sheets as housing prices taken off life support would have crashed and taken their owners into this hole.
Make no mistake there was a decision to be made. Someone had to be thrown under the bus. When Paulson walked into congress with the demands from the large banks the die was cast. Those of us not saved by the central bank and GSE housing price/MBS bailout were the ones thrown under the bus.
Will
