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Say would tell us something else-that supply is paid for with supply. Ultimately math cannot make you richer-you need to produce more to consume more.
by jswinghammer 13y ago
Say would tell us something else-that supply is paid for with supply. Ultimately math cannot make you richer-you need to produce more to consume more.
- ddebernardy 13y agoYou're misunderstanding money creation: Classical economist's explanation: bank has 100, lends you 90 so as to keep 10 in reserves. 90 gets spent and part of it lands in the bank. Rinse, repeat. What actually happens: bank has 10, lends you 100. It gets spent and part of it lands back in the bank. If it's not enough to post proper reserves, bank begs central bank for a buck or two to make things work. Rinse, repeat. It's not an opinion by the way: it's by the own admittance of the SEC. See Steve Keen's research for more details.
- jswinghammer 13y agoI'm not misunderstanding the nature of how credit works. I'm well aware that reserves follow loans and not the other way around. That money creation cycle is what leads to the business cycle in my opinion (see Austrian business cycle theory for more). The problem is that it creates a pyramiding of debt that eventually will collapse as inflation gets out of hand and interest rates rise.