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Remember, their money supply fell, not ours.
It may become inflationary for them as things may now cost more because they don't have the money to pay for it.
Remember, their money supply fell, not ours.
It may become inflationary for them as things may now cost more because they don't have the money to pay for it.
Prices typically drop when there is a lack of available consumer money.
Remember, their money supply fell, not ours.
It may become inflationary for them as things may now cost more because they don't have the money to pay for it.
You have that backwards, buddy.
Quote:
Originally Posted by freemkt
Then consumer poverty is good for the poor and consumer prosperity is bad for the poor?
Sure, if you define "the poor" as people who are immune to pay cuts and job losses, and have no net debts.
"The equivalent of millions of dollars" suggests the destroyed money was in some currency OTHER than USD, and thus a currency considerably smaller than the dollar.
Even if it were in hard US currency, any deflationary impact would be as near to zero as conceivable. Depending on how you count, the US monetary supply is from $3 trillion to $10 trillion--and either of those numbers does not account for capital assets.
An airstrike by the U.S. blew up an ISIS warehouse in Mosul, Iraq where the terror group stored the equivalent of millions of dollar in cash to finance their operations, a senior U.S. defense official told Fox News on Monday.
The cash storage facility in the Iraqi city was hit by two 2,000-pound bombs, according to the official.
It was unknown how much money was in the facility, but it is estimated to be “in the millions,” the defense official said.
The physical cash in circulation is a tiny fraction of the total money supply. The vast majority of money is virtual and is created whenever debt is incurred.
Deflation in todays world has nothing whatsoever to do with the physical cash in circulation. Deflation is a function of the default of debt. When ever a loan or debt is defaulted on, the virtual money which was created when the loan was made simply disappears.
That is the reason the FED needed to inject billions of dollars into the banks and begin QE to replace the money that was destroyed during the 2008 fiasco.
The physical cash in circulation is a tiny fraction of the total money supply. The vast majority of money is virtual and is created whenever debt is incurred.
Deflation in todays world has nothing whatsoever to do with the physical cash in circulation. Deflation is a function of the default of debt. When ever a loan or debt is defaulted on, the virtual money which was created when the loan was made simply disappears.
That is the reason the FED needed to inject billions of dollars into the banks and begin QE to replace the money that was destroyed during the 2008 fiasco.
Deflation isn't directly associated with the money supply, just like inflation isn't associated with the money supply.
During the economic downturn, economists that didn't believe in Keynes predicted that the Fed increasing the money supply was going to result in hyper-inflation. They couldn't have been more wrong.
Let us remember that deflation is a decrease in the general price level of goods and services.
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