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It wouldn’t immediately cause inflation, but eventually they would start spending that money under their mattress, causing the amount of money in circulation to
by gbear605 8y ago
It wouldn’t immediately cause inflation, but eventually they would start spending that money under their mattress, causing the amount of money in circulation to increase.
- 8note 8y agowouldn't that happen anyways? if people have money on banks, they're still going to use it eventually. the thing that changes if the money is under mattresses is that the banks stop having money to lend and invest. I don't know if that creates inflation or not?
- ric2b 8y agoYes, but now when it happens the newly created money is there as well.
- throw0101a 8y agoAt some point the panic would subside and they'd put their money back, though perhaps at another institution.