Re:How Not to Fight Inflation
by imtringued on Saturday July 16, 2022 @08:15PM
(#32123157)
>.. how is this not printing money and creating a deck of cards?
The liabilities cancel out the assets, the system is symmetrical and balanced. Money printing implies asset without liability and that is almost guaranteed to cause inflation. It is also not what is happening right now. If people want to save more money, companies have to borrow more money into existence, how is this supposed to cause inflation? As I said, the system is balanced.
Oversimplified example: So if I deposit $100, and the bank loans my money to someone who buys a car, and then the car company workers deposit their paychecks of, lets say, $100 in turn is re-lent out.. how is this not printing money and creating a deck of cards?
(for the record, Japan's banking reserve requirement is 0% as well. As the article points out, no one is borrowing, but here companies and consumers are swimming in debt)