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The fact that there is forced demand does not matter because the supply is potentially infinite. Look towards any episode of hyperinflation to see this on full
by datadata 4y ago
The fact that there is forced demand does not matter because the supply is potentially infinite. Look towards any episode of hyperinflation to see this on full display. You need both limited supply and non-zero demand to guarantee scarcity and thus value.
- orwin 4y agoThat's no how money works, money is mostly created by demand (93 to 97% in developped countries with efficient banking system). And that money is easy to destroy too, you could destroy 93% of existing dollars by reimbursing the debt owned by household, companies and US government.
- datadata 4y agoHow can you just ignore dozens of hyperinflation episodes? Clearly there are situations where supply becomes infinite.
- orwin 4y agoSorry, i should have said: that's not how money works in modern economies. I'm not ignoring hyperinflation, but clearly it has nothing to do with Zimbabwe or Venezuela. The only comparison could be the Weimar republic, as this disaster was caused too by production deficits (France invading the Ruhr valley+ loosing colonial income), but obviously similarities stop there.