Hahahaha, that is a brilliant summation Clevor Trevor.I know you...

Hahahaha, that is a brilliant summation Clevor Trevor.

I know you are right, I can't fault the analogy and for the life of me I can't see when that process breaks down.

Damn, you've just blown away weeks and weeks of analysis with one tongue in cheek post. I hope you're happy with yourself.

I think the analogy should be extended though so that the hotel owner has a top of the range colour photocopier and rather than pass off the 100 euro bill he copies it and uses the copy to pay the butcher. The butcher also has a top of the range colour photocopier and he copies the copies, pockets the original copy and uses the copy of the copy to pay the pig farmer and so and so on.

The analogy must be extended just that little bit further such that each copy loses incremental fidelity as time goes by to such a slow extent that noone realises and years down the track they are passing off the equivalent of Salvadore Dali paintings in the shape of money.

The last and final extension of the analogy has all the actors spending all their time at the photocopier furiously copying their notes, no one is actually do any work because they realised it's easier to just photocopy their money. The the only one getting wealthier is the company selling the photocopiers.

That company in this analogy is the Fed Reserve.