3 ms·
> or do the shareholders just hoard the money, taking it out of circulation without either investing it or using it to create more demand? Hoard as in like, un
by dodobirdlord 7y ago
> or do the shareholders just hoard the money, taking it out of circulation without either investing it or using it to create more demand?
Hoard as in like, under a mattress? No. Investors keep pretty much all of their money invested pretty much all of the time, or the banks that they store their money in do by proxy.
- dctoedt 7y ago> Investors keep pretty much all of their money invested pretty much all of the time, or the banks that they store their money in do by proxy. That's only true when banks actually lend. In the wake of the Great Recession, however, many banks drastically cut back on their lending — and to that extent they were no more than giant virtual mattresses into which their depositors' money was stuffed. As a Federal Reserve official said in 2015 about the Great Recession's aftermath: "... the sharper decline in outstanding bank loans to businesses that I mentioned earlier was likely a contributing factor to the slower economic recovery we have observed this time around." [0] [0] https://www.bis.org/review/r150417b.pdf https://www.bis.org/review/r150417b.pdf