Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: cgbg
Won't matter as long as the r’s and d’s run trillion dollar deficits.
27 posted on 11/02/2022 11:32:13 AM PDT by Theoria
[ Post Reply | Private Reply | To 24 | View Replies ]


To: Theoria

If the economy truly crashes then inflation will stop.

The reason for this has to do with the modern private credit system.

In the “old days” the increases in the money supply was just the money created by the fed—which was largely a function of government deficits.

However, there is now additional “money” in the system—and that is any new outstanding debt—new credit card debt, new bank loans, new car loans, new mortgages, new corporate loans etc.

That private “money” literally is created out of thin air.

When the economy crashes that “other” money goes away which deflates the currency—so even if the fed is printing up a storm it is either partially or fully offset.


39 posted on 11/02/2022 11:38:55 AM PDT by cgbg (Claiming that laws and regs that limit “hate speech” stop freedom of speech is “hate speech”.)
[ Post Reply | Private Reply | To 27 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson