Money owned, if it's absolutely never spent, doesn't matter. If it really just sits in a safe somewhere it's as if it doesn't exist in the first place.
The amount of money in circulation matters. However with someone owning a lot there is a risk of them suddenly putting it in circulation and thus suddenly changing the amount of money in circulation. This will cause prices to fluctuate causing price instability. Up or down doesn't matter.
This isn't an abstract problem btw. Fiat currently has problems that are similar. https://www.investors.com/etfs-and-funds/sectors/sp500-companies-stockpile-1-trillion-cash-investors-want-it/
This goes both ways btw, someone being owed a lot of money ("owning" a large negative sum) can suddenly demand loans to be paid back and thus suddenly withdraw a lot of money from circulation with prices again fluctuating. I believe the financial crisis in the USA in the 30's was caused that way.
This is why you need demurrage on money, according to Silvio Gesell's writings. It discourages stockpiling. You'll have to abandon dreams of generational wealth and other outgrowths of capitalism but it'll keep you from starving because of a financial crisis.
frphank
npub1g7…u8yd9
2024-03-19 14:39:07
in reply to nevent1q…kczy
Author Public Key
npub1g7lqk25fl24xd0zh7hr8jgp5smdy2eszjh9nmv7z7w85h6xcs9hq4u8yd9Published at
2024-03-19 14:39:07Event JSON
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"content": "Money owned, if it's absolutely never spent, doesn't matter. If it really just sits in a safe somewhere it's as if it doesn't exist in the first place.\n\nThe amount of money in circulation matters. However with someone owning a lot there is a risk of them suddenly putting it in circulation and thus suddenly changing the amount of money in circulation. This will cause prices to fluctuate causing price instability. Up or down doesn't matter.\n\nThis isn't an abstract problem btw. Fiat currently has problems that are similar. https://www.investors.com/etfs-and-funds/sectors/sp500-companies-stockpile-1-trillion-cash-investors-want-it/\n\nThis goes both ways btw, someone being owed a lot of money (\"owning\" a large negative sum) can suddenly demand loans to be paid back and thus suddenly withdraw a lot of money from circulation with prices again fluctuating. I believe the financial crisis in the USA in the 30's was caused that way.\n\nThis is why you need demurrage on money, according to Silvio Gesell's writings. It discourages stockpiling. You'll have to abandon dreams of generational wealth and other outgrowths of capitalism but it'll keep you from starving because of a financial crisis.",
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