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It doesn’t run out. It just gets stuck.

• jcims 7y ago
  I'm sure someone has come up with a better analogy, but dollars are like electrons, they only do work when they move. I was looking at some other HN thread a while back and there was someone talking about how a subscription model works much better for investors because the regularity of returns worked best with expectations from the investors. And it occurred to me at that time that this electric analogy might extend to impedance matching between investor and investee...with the best matched networks operating the most efficiently. (And of course, if you can develop an investment model that matches underserved opportunities you might find a way to make some money.)
  • basilgohar 7y ago
    Upvoting because, to be honest, the moving electrons/moving dollars analogy works really well for me, and especially I think that's a useful analogy. For a society, in general, dollars sitting idle in a bank account instead of being spent on something constructive or services where someone is getting paid for work or something of utility is being built/created are not, from my perspective, useful to that society. Sure, someone's balance sheet might be achieving larger-and-larger numbers, and that serves their own purposes, but not those of greater society.
    • Anon1096 7y ago
      If you think money is just sitting in a bank account then you misunderstand how the economy works. Money in a bank gets reinvested by the bank and funds loans, mortgages, and credit. The only money that isn't moving is dollars literally stuffed under a mattress and what the bank keeps on hand to fulfill reserve requirements.
      • b_tterc_p 7y ago
        Sort of. Banks want to loan out money. But when consumer spending drops, they loan out less. In a recession there is more risk, so it’s harder to find profitable loans to make. The money does get stuck.