What if the product is from an extractive industry, e.g., oil, natural gas, coal or gold? Maybe, agriculture, timber or hydroelectric power?
How the other person came up with the cash doesn't matter. Say they borrow it all. In that case the entity that loaned the money now has an asset equal to the loan and the customer has an asset equal to what it owes. No changes in Net Assets.
I see where you are going with this. But what's the point? Sure money creation is predicated on either debt creation in the economy (multiplier affected money) or debt creation on the Fed's balance sheet (base money). Base money, unlike bank created money doesn't feel the same effects of these debt destruction cycles, because ultimately the Fed controls it and its 'liabilities' are to no one but the populous (which indeed makes the net Fed liabilities have more in common with shareholder equity). Since the Fed never has pressure to pay its debt down, nor anyone to foreclose it, the negative connotation that debt carries is lost. Fed debt isn't the same animal as personal (or even government) balance sheet debt. Because of this, its not a race to zero.
I was about to bring up the point of an upward revaluation of a gold miner balance sheet. There is no change in real gold assets, but a change in the balance sheet without increasing liabilities nor creating more debt. But then this goes into the whole zero sum stock value discussion world... Another topic altogether. Ultimately, he's talking about money creation. All money creation is based on debt issuance, but as I discussed in the previous message, Fed debt monetary creation is another animal, and not subject to the same pressures that debt destruction cycles exert on money supply. Ultimately because there is no bill collector for the Fed.
The point was you made the claim that you can increase assets without debt and now we both see that that was not a correct statement.
Well you made the claim generally, and that was not correct. It is correct in terms of money creation, but not correct in other systems.
And if the loan isn't made (ie, money isn't created), nobody has anything. I think we're saying the same thing, in roundabout ways.