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By this logic, withdrawing money from the ATM increases money supply... Also, the expected amount of silver in the ground is factored into the current price of
by bcsmith 12y ago
By this logic, withdrawing money from the ATM increases money supply... Also, the expected amount of silver in the ground is factored into the current price of silver. It's really only when new deposits are discovered that there is an impact to the price. Actually pulling known silver deposits out of the ground has a negligible effect on the price.
- hueving 12y agoThis is completely false. If what you were saying were true, the price of oil would not change when the stability of the middle east was under question. Supply is the amount on the market, not the amount locked up somewhere that can't be brought to market immediately.
- josu 12y ago>By this logic, withdrawing money from the ATM increases money supply It does. Although it has been critized, the quantitative theory of money [1] could perfectly explain the drop. [1]http://en.wikipedia.org/wiki/Quantity_theory_of_money http://en.wikipedia.org/wiki/Quantity_theory_of_money
- baddox 12y agoIf a bunch of people in a city decided to withdraw cash from all the ATMs one day, so that the amount of cash in ATMs got very low, don't you think the banks could increase the ATM fee and discover that people would be willing to pay the higher price? That example fits the logic perfectly.
- Cthulhu_ 12y agoExcept fiat economics are a bit more complicated than that. Everyone getting a 100% wage raise would increase money supply (and by extension massive inflation).