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Author Topic: Handling Currency in Depressions  (Read 1953 times)

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Offline Vekseid

Re: Handling Currency in Depressions
« Reply #25 on: December 31, 2009, 05:18:33 PM »
I was under the impression 'hoarding' involved material goods, not capital.

This reminds me of Margaritaville on South Park. Saving money instead of spending it (at least for the upper class) is just going to make things worse.

Rich people saving their money would be fine if the banks were lending, or if we weren't so locked into credit. As long as liquidity is flowing, the economy functions.

Offline AsurasTopic starter

Re: Handling Currency in Depressions
« Reply #26 on: January 01, 2010, 10:05:50 PM »
Quote from: Josh the Aspie
I'm still trying to get a handle on how people here are using it.  For those that do, is having a reserve of resources distinguishable to you in any way from hoarding that resource?

What I mean by "hoarding" is basically just normal "saving" taken to an extreme.

So, for instance, if a bank is making no new loans and significant investment - if it's using its earnings to do essentially nothing but pay down debt, build cash reserves, and purchase low-risk assets - then that goes beyond normal saving and into hoarding.

It's not a quantitative difference; I'm just using the word to describe the concept of banks saving so much that it actually hurts investment and real economic growth.
« Last Edit: January 01, 2010, 10:14:28 PM by Asuras »