Not really. Most money is actually just numbers on a spreadsheet. This is because loans actually create money in a virtual sense. If you want to reduce the money supply, a better approach is to up interest rates, which encourages people and companies to reduce how many loans they take and pay off the ones they have.
And yes, this is what the Biden administration did to reduce inflation, and it worked. At the start of his term it was over 8%, and at the end it was under 4%.
Unfortunately, people don’t understand that reduced inflation doesn’t mean reduced prices. It just means the prices don’t go up as fast. They also don’t understand that negative inflation, i.e. prices going down, is actually terrible for an economy since everyone is then encouraged to spend as little as possible, reducing cash flow
Not really. Most money is actually just numbers on a spreadsheet. This is because loans actually create money in a virtual sense. If you want to reduce the money supply, a better approach is to up interest rates, which encourages people and companies to reduce how many loans they take and pay off the ones they have.
And yes, this is what the Biden administration did to reduce inflation, and it worked. At the start of his term it was over 8%, and at the end it was under 4%.
Unfortunately, people don’t understand that reduced inflation doesn’t mean reduced prices. It just means the prices don’t go up as fast. They also don’t understand that negative inflation, i.e. prices going down, is actually terrible for an economy since everyone is then encouraged to spend as little as possible, reducing cash flow