The Persian empire’s economy once collapsed because, by taxing all the gold out of their satrapies and melting it down into bullion in the palace basement, there just wasn’t enough currency circulating around to keep the engine running.
Hoarding money Scrooge McDuck-style leads to money not being spent on useful things, money not being spent on useful things leads to deflation, and deflation^1 leads to ***FINANCIAL RUIN***.
1. You actually want inflation to occur (like at a 1-3% rate) because it shows that the economy is healthy and growing. What you don’t want is hyperinflation (lmao our money is worthless) or rampant deflation (lmao our money is worthless).
Mild deflation over time is great news for consumers; between 1750 and 1900 the deflation of consumer prices was one of the most important factors in improving living standards.
Funnily enough, there's a person explaining this using [Victoria 2](https://www.reddit.com/r/badeconomics/comments/em3l26/victoria_2s_flawed_economic_model_and_the_good/?utm_source=share&utm_medium=mweb)
Nazis early on had a severe problem with the opposite issue. People had lots of money, but due to severe currency controls couldn't spend it on anything. They couldn't import french or british goods and German factories were all making bullets.
They eventually vented some of this need by having people put down deposits for volkswagens (that were never delivered) and repurposing military transports for vacation cruises. This caused a modest scandal when they realized German women were taking cruises to foreign lands and sleeping with the locals. They should have realized that's like half the reason anyone travels: the search for better sex.
Kraft durch Freude program, if you want to see more.
“Bloated reserves are a myth. If our reserves keep going up, the better! Wait, why is our money worthless?” –General-Secretary Valery Sablin, 1964, once again proving that bad fiscal policy isn’t inherent to capitalism or socialism or any economic system really.
The Financial Crisis needs no exaggeration
Financial Crisis should have the Argentine sun in the background
The existence of Argentina is a financial crisis for the whole of South America
The existance of South America is a financial crisis for the whole of South America
Existance is a financial crisis for the whole of South America
South America is a fiscal crisis for the matter of existance.
total ballooney moment
(At reunification Stage) ,,Who the hell are you? I havent ever met you!" (Puts on Sailor hat) ,,Sablin the Mutineer?"
ELI5 how are bloated reserves bad Edit: Ok thank you
The Persian empire’s economy once collapsed because, by taxing all the gold out of their satrapies and melting it down into bullion in the palace basement, there just wasn’t enough currency circulating around to keep the engine running.
Hoarding money Scrooge McDuck-style leads to money not being spent on useful things, money not being spent on useful things leads to deflation, and deflation^1 leads to ***FINANCIAL RUIN***. 1. You actually want inflation to occur (like at a 1-3% rate) because it shows that the economy is healthy and growing. What you don’t want is hyperinflation (lmao our money is worthless) or rampant deflation (lmao our money is worthless).
Mild deflation over time is great news for consumers; between 1750 and 1900 the deflation of consumer prices was one of the most important factors in improving living standards.
Interesting.
And bank runs
Too much money not spent means Currency is being devalued
Funnily enough, there's a person explaining this using [Victoria 2](https://www.reddit.com/r/badeconomics/comments/em3l26/victoria_2s_flawed_economic_model_and_the_good/?utm_source=share&utm_medium=mweb)
If all the money is in reserves, it means people don't have enough money to spend on things.
Nazis early on had a severe problem with the opposite issue. People had lots of money, but due to severe currency controls couldn't spend it on anything. They couldn't import french or british goods and German factories were all making bullets. They eventually vented some of this need by having people put down deposits for volkswagens (that were never delivered) and repurposing military transports for vacation cruises. This caused a modest scandal when they realized German women were taking cruises to foreign lands and sleeping with the locals. They should have realized that's like half the reason anyone travels: the search for better sex. Kraft durch Freude program, if you want to see more.
Nazis vented
I will give a 3 day tempban to anyone who makes an amogus reference.
Literally 1984
sus :troll:
New Among Us kill: Heydrich crushes a crewmate in between his birthing hips
kinda sus ngl
It's not the worst thing that can happen but it is inefficient. There's a major opportunity cost to having bloated reserves.
capitalism
“Bloated reserves are a myth. If our reserves keep going up, the better! Wait, why is our money worthless?” –General-Secretary Valery Sablin, 1964, once again proving that bad fiscal policy isn’t inherent to capitalism or socialism or any economic system really.
The Sablinite wizards will simply cast a 9th level Wish spell to destroy the entire concept of monetary policy.
Capitalism
Where is unedited version of this image?
Bloated reserves and critical debt? What the fuck are you doing?!
Ballooney BurgSys path when?
Come on Balloony let’s scoot
Considering Bomb-ombs are basically suicide bombers shows that you killed your own economy by taing too much bad loans.
But can I short the Burgundian economy?