Back on track

Finally i've taken up a habit that's been in hibernation for some years; fine art.
So here's the first image in a suite; Machine I.

Simulation loop

Just reading Douglas Hofstadtler's I am a strange loop. Highly recommended! (doubtless, although I'm just half way). It's about self-referential systems. About feedback in systems. Feedback in our brains creating the "I" we all experience so real. But is it?
An idea I've had swimming around in my cranium for some time got re-fueld:

Is it possible to day to create a simulation in which a simulation is running, simulating the first simulation? Simulating each other.

Or is this just a stupid and impossible idea?
Myself, a layman in computer simulation need feedback. If you have any thoughts abot this. Arguments, speculations or other comments, please comment.