4 ms·

Hence the existence of a clearing house in the stockmarket: cross off debt and credit in the whole market. Every one in your story has 100 credit and 100 debt w

Hence the existence of a clearing house in the stockmarket: cross off debt and credit in the whole market. Every one in your story has 100 credit and 100 debt which makes them worth 0. Aligning that in the right way makes a lot of sense :-)

cgb223 5y ago
This is a brilliant explanation of what a clearinghouse does First time I’ve understood it intuitively
- zanybear 5y ago
  Interestingly, the scenario does not include transaction costs. In the general sense that is money that stays in the cycle (economy) ?