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Imagine we own a company, I own 20 stocks, you own 10 stocks. I unilaterally decide to print 10 more stocks and give them to myself. Do you have the same amount
by LudwigNagasena 5y ago
Imagine we own a company, I own 20 stocks, you own 10 stocks. I unilaterally decide to print 10 more stocks and give them to myself. Do you have the same amount of stocks? Yea, but in real terms now you have less stocks. The same thing with money. It doesn’t matter how much money you have, what matters is how much you have it relative to others.
- liaukovv 5y agoI don't believe this would cause any additional inflation, since this is not scenario of creating money, but rather converting one class of money(bank deposit) into another class(reserve notes).
- LudwigNagasena 5y agoThe people may even simply move money from one bank to another, it doesn’t matter. What matters is that the bank goes insolvent. So what you have now is a bunch of loans not supported by anything.
- bidirectional 5y agoDepends entirely on the velocity of money. Remember also that central banks can remove money by raising interest rates. If we're doing child-like examples, if the central bank prints a trillion dollars in notes and then sends them to the moon and promises never to use them, is anyone really poorer?