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I started to type out about how those investments need to eventually end up as a product on the shelf (metaphorically, B2B counts) to keep the supply/demand cyc
by czinck 10y ago
I started to type out about how those investments need to eventually end up as a product on the shelf (metaphorically, B2B counts) to keep the supply/demand cycle going, but I don't think that's necessarily true. The money should end up as either all salary, or some salary and some product, but the salary gets spent so the supply/demand wheel keeps spinning.
If too much goes to salary than the investment stops making sense and the rich will hoard cash instead, but I don't think we're in that situation. Could that be why QE was pumping so much money into the economy with inflation staying low? I bet there are statistics about the amount of cash people and companies are hoarding now vs 50 years ago, but there's too many confounding variables for me to figure it out.
- robotresearcher 10y agoEven cash deposits are held in banks and (a large fraction of the total held by any bank can be) loaned out into circulation.