How can it be possible with record deficits and stimulus spending that money supply is contracting?
do deficits have anything to do with a growing money supply???
do you consider the dollar..us currency, money??
is the money supply actually shrinking???
has the money supply shrank before??
was there a great jump in dollar supply in 2009 to more than compensate for the alleged
contraction of dollars generating an overall net increase in dollars…you consider the dollar money right??
What I’m saying is, that even when the debt is repaid, the dollar doesn’t go away. The banker spends it. Am I wrong about that? If so, explain why.
My understanding is that when someone repays the dollar, it goes onto the asset side of the bank’s balance sheet, replacing the value of the ‘promise to pay’ on the balance sheet with cash - but whether that cash re-enters the economy depends on whether (1) the bank is willing to loan it - they might need to hoard it to offset losses, and (2) whether anyone will take out a loan - a lot of people are maxed out and can’t handle more debt.
So as long as people/corporations/other banks are defaulting on ‘promises to pay’ and thereby destroying the bank’s balance sheets, and people/corporations/other banks are also strongly favoring using new money to pay down debt instead of spending or saving or using it as collateral for new loans, the Fed could conceivably drop a lot of money on the American people (throw it out of helicopters) and it would never enter the real economy -because it’s first being used to pay down debt to banks and second getting sucked into black holes on the banks balance sheets.