Mar 13, 2023
Where does all the money go when the money supply declines? This is a question that has been on many people’s minds recently, simply because the money supply does not normally contract. Historically speaking, we can go back as far as 150 years. We can see that very rarely does the growth rate of money dip below 0%.
Meaning, the money supply is growing and only a few times in the last 150 years has the total amount of money in the system shrunk. So, one, how does this happen? And number two, where does that money go when it disappears from the system when the total amount of money shrinks?
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