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Savings don't cause inflation at all. Imagine adding $100K to every one's bank account in the US, and make sure that these accounts are frozen for 30 years; thi
by raincom 4y ago
Savings don't cause inflation at all. Imagine adding $100K to every one's bank account in the US, and make sure that these accounts are frozen for 30 years; this doesn't increase aggregate demand at all.
- scottiebarnes 4y agoFractional reserve banking allows a bank to take deposits and create loans up to some ratio, thus increasing money supply in the economy.
- raincom 4y agoLoans create deposits, this whole fractional reserve banking is nonsense taught in many schools.