Warlock - maybe without realising it you have just described what actually happens with regard to the theory of money supply and velocity - which in its various forms is called things like M1/2/3.... or in your example about M10!!
This is exactly how western banks actually operate - money only exists as a mechanism to exchange goods and services and has no inherent value in itself as your example demonstrated so well..
in a similar example lets assume that an object ( car what ever) worth 100 dollars exists and owned by B. A buys the car from B for $100.
The bank makes an entry into A's account that puts him into 100 overdraft, then it makes an entry in Bs account that he has 100 in surplus when he deposits the cash.
It then charges A interest at 10% and pays ( if he is lucky) B interest at 5%.
At the end of the year A pays back his $110, B withdraws his money - $105 and the bank has , voila... made $5 for doing..... nothing.
But where is the extra $5 created from... it actually doesnt exist... except as a figment or purely as 'a numerical 'entry for bookkeeping purposes.
There is actually insufficient physical money in the world to cover all the 'numerical ' entries in IT systems..banks and such are just manipulating information .. and this is what folks are starting to realise now and hence the potential return to real money such as gold and silver ( which cannot be 'created ' by politicians..
That is why islamic financing has made a move forward over the last few years to try and address this creation of profit or return from risk and interest etc.
Of course the nakheel sukuk/bond etc has just set that programme back several decades as the confusion of where 'bond holders' sit in the line of creditors is somewhat blurred..
anyway .. I like your ponzi scheme example...!!WJA
