>I think you are implying the companies and people borrow money for shits and giggles.
Nope. I was just using an example. It could have been $100k and only $50K was lent out. You sill would need $105k at the end of the year to satisfy all debts and have an equilibrium within the economy. Where is the extra $5K coming from? Magic??
> The reality is that most companies borrow money only when the availability of extra capital would help them generate more revenues or capture additional market share.
This doesn't change the fact that the demand back for money will exceed the actually money supply.
It is simple math really. The fact that they are using the cash to, hopefully, generate more revenues is irrelevant.
Private companies have no control over the the supply of money. This is a central banking problem.
Nope. I was just using an example. It could have been $100k and only $50K was lent out. You sill would need $105k at the end of the year to satisfy all debts and have an equilibrium within the economy. Where is the extra $5K coming from? Magic??
> The reality is that most companies borrow money only when the availability of extra capital would help them generate more revenues or capture additional market share.
This doesn't change the fact that the demand back for money will exceed the actually money supply.
It is simple math really. The fact that they are using the cash to, hopefully, generate more revenues is irrelevant.
Private companies have no control over the the supply of money. This is a central banking problem.