Re:Global real interest rates and the ‘suprasecular’ decline...
by vkou on Friday January 29, 2021 @02:49AM
(#25955063)
> Ceteris paribus, creating more money reduces its value.
That is correct. What you're missing is that a large fraction of created money used to come from banks lending money. During a recession, or a pandemic, that lending tightens, which slows the rate at which money is created, and speeds the rate at which money starts getting destroyed.
It's why the fed prints money during recessions, and destroys money during economic booms.
That is correct. What you're missing is that a large fraction of created money used to come from banks lending money. During a recession, or a pandemic, that lending tightens, which slows the rate at which money is created, and speeds the rate at which money starts getting destroyed.
It's why the fed prints money during recessions, and destroys money during economic booms.