Ron Paul: 'We're Going To All Suffer And Pay' For The Bailout

I asked this before on another thread, and as far as I can tell, noone ever answered. The money that vaporized in the banks hands, was fiat money. The government simply created more fiat money to replace it. If it is the same amount, no inflation, no deflation, the only effect would be on 'homebuyers', notice not home OWNERS, that lost what they had to the banks. So does anyone know the gross amount lost by the banks? Was it under, at, or over $700 billion? That would say if we will have inflation, or deflation, or no effect. For now, the Fed is not printing more money, and that preserves the status quo with foreign lenders to the US government, like China. What is the figure?

Originally posted by Gregarious
I asked this before on another thread, and as far as I can tell, noone ever answered. The money that vaporized in the banks hands, was fiat money. The government simply created more fiat money to replace it. If it is the same amount, no inflation, no deflation, the only effect would be on 'homebuyers', notice not home OWNERS, that lost what they had to the banks. So does anyone know the gross amount lost by the banks? Was it under, at, or over $700 billion? That would say if we will have inflation, or deflation, or no effect. For now, the Fed is not printing more money, and that preserves the status quo with foreign lenders to the US government, like China. What is the figure?

What 'vaporized in the banks hands' was not money, it was DEBT. When the Government 'simply creates fiat money to replace it', it is monetizing that DEBT, thereby making it REAL.

You see, the DEBT was created through fractional reserve banking, which is legalized fraud. Only when that DEBT is converted to paper money does it become a reality since it devalues all existing paper money. If they are successful in 'reinflating' this mess then you will see several Trillion dollars worth of DEBT come rolling into everything.