2 ms·
In the past several US financial crises, most notably 2007-8 and 1929, it wasn't loss of faith in currency which was instrumental, it was a lack of availability
by dredmorbius 2y ago
In the past several US financial crises, most notably 2007-8 and 1929, it wasn't loss of faith in currency which was instrumental, it was a lack of availability and flow of currency, largely due to debt structuring.
In both cases, what eventually resolved the matter was not banks spontaneously restoring solvency, but the central bank, that is, the financial entity capable of creating new money out of thin air, which reliquidated the banks, greatly assisted in the earlier instance by vast increases in government spending as a consequence of WWII.
There's a group who likes to preach loss of faith in the US dollar; their predictive record has proved quite poor. Despite this it remains an inexplicably popular trope.