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