creation? (or more appropriate perhaps, the private sector's credit destruction in this environment... of course this could later flip and we have the two working hand in hand but that's not the question I'm raising here). Also, I am not sure how we resolve prices using this piece, not just volumes? I appreciate the argument all that matters is volumes and that the rest is just a distribution issue, but I feel like I haven't quite mentally closed the circle on this yet and would greatly appreciate your thoughts on this. I also think about the regulation coming in -- if banks will be required to hold larger buffers what then for the magnification of this impact via fractional reserves ? Lastly, all this just my opinion of course, I thought the piece worked okay in an international perspective and you could see the Asian surplus dynamic which, via the FX pegs, ended up adding a lot of USD in USD banks etc but I found I had to suspend the behavioural element, ie. that there could be a run on the currency if policy gets too aggressive. Obviously this creates a big problem for the Europeans who cannot print. There really isn't any such thing as a "fractional reserve system". Loans create deposits, as a matter of accounting, and reserves adjust later. The "reserve requirement" is just a tax on banks, which (in the past, at least) required them to hold a certain amount of assets in non-interest bearing