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Not quite . The banking system naturally creates new money during booms and destroys it during busts. In theory, the federal reserve is supposed to act as a cou
by simple-thoughts 4y ago
Not quite . The banking system naturally creates new money during booms and destroys it during busts. In theory, the federal reserve is supposed to act as a counterweight leading to stability. In practice, it usually accentuates those trends due to political pressure - during bull markets like 2009 thru 2021, people think it’s a new normal and money printing even more is ok. Meanwhile consumer inflation stays low because everyone is putting money into assets that are going up exponentially.
- naveen99 4y agoThink about how your confidence in yourself affects your future earnings expectation and your willingness to take on debt or pay it off. that confidence can change over night due to internal and external factors. So you yourself also create and destroy money with your changing confidence.