Money supply driven depression: 1.) Money supply goes down (people get paid less) 2.) Prices stay high because people dont see whats happening
Some people stop working because they feel like they are not getting paid enough, almost everyone is going to spend less since they have less money (who is going to work more for a lower wage?), since prices arent going down less stuff is sold and capacity is cut (lay offs).
God damn. The carnival analogy makes it so simple.
Absolutely amazing:
ReplyDeleteMoney supply driven depression:
1.) Money supply goes down (people get paid less)
2.) Prices stay high because people dont see whats happening
Some people stop working because they feel like they are not getting paid enough, almost everyone is going to spend less since they have less money (who is going to work more for a lower wage?), since prices arent going down less stuff is sold and capacity is cut (lay offs).
God damn. The carnival analogy makes it so simple.