> Query.
>
> A invests in "fiance" -- by buying some kind of aper from somebody
> (B). Now B has the monmey. She does something with it, which puts it
> in the hands of C. C (bank, individual, corp, whatever) then does
> something with it.
>
> Can someone suggest stopping points in the sort of pointless circle?
> Or make it intelligible to a non-economist?
Carrol, you ask a good and sensible question.
The answer is that it never stops. A dollar, once in circulation, basically never stops being in circulation. So it keeps going round and round. To aid your intuition, you should not think of it in terms of "where does it stop?" but rather "at how fast a rate does it go?" The rate at which the "average dollar" turns over is called the velocity of money. It's an important variable. And in general, velocity rises when economic activity is buoyant, and especially when there is a fast rate of *credit* growth. Credit is a device for making the average dollar go round at a faster rate. Without credit, a dollar will only be exchanged if it happens to be owned by the same person who happens to want to buy something right now. But with credit, that dollar can be advanced to whomever has a need to buy something at a given moment, whether or not he owns that dollar at the moment. And the volume of credit, in turn, is determined by people's expectations and beliefs about the creditworthiness -- i.e. the money-generating capacity -- of others. So you can see that it's a system based in large part on self-fulfilling prophecies.
SA