Re:What Economists Still Don’t Get About the 2008 Crisis
by pas on Sunday August 05, 2018 @11:29AM
(#17691792)
Money parked in bonds?
When a bond is initially offered someone pays money for it, and the offering party gets the cash, and buys things with it.
That equation is independent of the form of money. Bonds can switch hands easily. Of course, if it turns out that the bond is junk, then it becomes hard to sell, so that slows down V indeed. (Which means the economy takes a moment to think when a lot of things turn out to be shit instead of gold. Credit becomes thin, etc.)
When a bond is initially offered someone pays money for it, and the offering party gets the cash, and buys things with it.
That equation is independent of the form of money. Bonds can switch hands easily. Of course, if it turns out that the bond is junk, then it becomes hard to sell, so that slows down V indeed. (Which means the economy takes a moment to think when a lot of things turn out to be shit instead of gold. Credit becomes thin, etc.)