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To: FarCenter

the additional money is comparable to an overstock then, no?
What do you do to get rid of overstock?

You have a sale, not a restriction on it’s use.

raising prices lower the circulation of paper money because we already spent too much to live or to purchase that extra something, an over circulation of cash is not a reality to the average consumer, and a bank that is not lending, has more than they need.

It would seem that the only way to use up that surplus is to purchase something for investment, such as houses or land because of the return. Not increase the cost of beans.


78 posted on 06/15/2022 6:16:51 AM PDT by RaceBannon (Rom 5:8 But God commendeth his love toward us, in that, while we were yet sinners, Christ died for )
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To: RaceBannon

Buying a house or land does not decrease the amount of money in circulation. It decreases the buyer’s bank balance and increases the seller’s bank balance (and the balance of the real estate agents, etc.)

The money supply can be decreased by reducing banking system reserves or by reducing the ratio of loans to reserves.

The only “commercial” transaction that destroys money is (I think) bankruptcy. The amount of money lost by the lender is, in effect, destroyed.


100 posted on 06/15/2022 6:40:32 AM PDT by FarCenter
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