James Ahiakpor alleges that I have an unbalanced balance sheet in my 
discussion of credit-financed investment.  I may err in many ways, but I am 
not unbalanced!  James contends that bank notes are assets - but not to the 
issuing banks.  They are equivalent to the deposits that he rightly 
recognizes as liabilities.  My balance sheet balances!  And the loans 
created are pure credit, so long as the notes issued continue to circulate. 
 
As for the numbers in my example, they are arbitrary and of no consequence. 
Note creation can proceed quite apart from whether cash reserves equal the 
new note issue. 
 
--Neil Skaggs