James Ahiakpor wrote: "Surely, Henry George is mistaken in the reproduced 
   quote.   He thinks because bonds, mortgages, notes, and bank bills are 
   concurrently assets and liabilities that their increased level does not 
   represent an increased level of wealth in a community.  But for someone to 
   purchase those financial assets, they must have earned income.  Thus these 
   financial assets represent the (increased) savings of the community. Their 
   purchasers are only making it possible for others to increase their own 
   spending  beyond  their  current  levels  of income.  Indeed, it is in 
   high-income communities that more of these financial assets are prevalent, 
   not in poor communities." 
 
   I am puzzled. Is it possible that real wealth remains exactly the same but 
   the supply of fiat money created by banks increase so that the financial 
   value of the existing wealth increases? How may I be sure that George was 
   mistaken? What happened to the real value and nominal value distinction? 
 
   Imagine that banks do not create new fiat money. But real output increases, 
   and there is additional real savings. I wish to understand how the financial 
   value of the financial assets will increase without an increased stock of 
   money? Has a situation called deflation any meaning? 
 
   Just puzzled. 
 
   Mohammad Gani