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> Print 10% more money, that's 10% inflation. No: If you're approved for a $100K loan, you are credited with $100K balance to draw from your account, and the m
by throw0101a 5y ago
> Print 10% more money, that's 10% inflation.
No: If you're approved for a $100K loan, you are credited with $100K balance to draw from your account, and the money supply is recorded as going up by $100K.
But if you don't withdraw any money from the account (e.g., a HELOC that you intended only for emergencies), then how can it be inflationary if it's not circulating in the economy? But it is registered as increased money supply.
- noduerme 5y agoDo a lot of people take out loans they never use? If you get a loan to buy a house, the seller gets the money immediately and uses it to buy another house. You've just put a whole house's worth of debt into circulation.
- throw0101a 5y ago> Do a lot of people take out loans they never use? Many business may have them. As I mentioned, HELOCs are a thing as well. Neither may be used to the absolute limit, but only on an as-needed basis.