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> That money is effectively removed from the economy. Not really. If that money is stored in a bank, most of it will be loaned out. If it is used to buy bonds
by briandh 12y ago
> That money is effectively removed from the economy.
Not really. If that money is stored in a bank, most of it will be loaned out. If it is used to buy bonds (including but not limited to government bonds) then it goes to the issuer. And so on.
- Agathos 12y agoBank lending to small businesses is way down since the start of the recession, and if they were inclined to start again they could borrow at nearly zero percent anyway. Bank leadership has been saying they don't see good opportunities. In that climate, Amazon's account makes no difference. See for example http://www.inc.com/jeremy-quittner/wells-fargo-earnings-and-small-business-optimism.html http://www.inc.com/jeremy-quittner/wells-fargo-earnings-and-... http://in.reuters.com/article/2014/07/12/eu-banks-dijsselbloem-idINL6N0PN0EY20140712 http://in.reuters.com/article/2014/07/12/eu-banks-dijsselblo... http://www.forbes.com/sites/cherylsnappconner/2014/07/11/stronger-economy-more-than-federal-policy-will-spur-business-loans-federal-reserve-presidents-say/ http://www.forbes.com/sites/cherylsnappconner/2014/07/11/str...
- adventured 12y agoThis is the only correct answer. Even if Amazon actually removed it from the economy by putting it under Bezos' mattress, that would boost the value of all remaining fiat, increasing purchasing power for everyone else. So consumers would gain a temporary burst of value, which they can utilize today; when the state then devalues fiat over time, Amazon's money will lose value, while the consumer will have locked in that higher purchasing power. There is no scenario under which Amazon actually hurts anybody by 'removing' money from the economy. Money and wealth are not fixed sums anyway.