Many people may have such a question, the economic crisis is not the destruction of money, everyone feels that the money in their hands is less, and in whose hands does it end up?
The answer to this question can be found in history.
In the 20s of the 20th century, the United States relied on natural resources, protectionism and self-demand-led economic development strategies to grow into the world's largest economy, with an unprecedented boom in the consumer market, a blowout development of the financial market, millions of people rushed to buy, and the bubble blew bigger and bigger.
But the "smart money" has smelled the danger and evacuated early, the ** crash of Wall Street, and overnight, there was nothing. The building is crowded with desperate suicide people, and even the welcome words of the hotel staff are, accommodation or jumping off the building?
The credit crisis also broke out, and banks tightened credit in order to recover losses, causing the consumer market to slump, ordinary people clutched their pockets and did not dare to consume, and factories "couldn't stand it" and ushered in production cuts and layoffs.
The Great Depression, where did the money go?
First, an increase in money does not mean an increase in real output. For example, if the bank lends 10 million currency to the people, and the people double the 10 million into 20 million bonds, it seems to be prosperous, but in essence, it is only a leverage derived from financial means, not "real gold".The "magic" of modern finance is that personal debts can be turned into money through banks!
People seem to have an increase in money on their books, which belongs to credit expansion, and once the Great Depression comes, ** plummets, credit naturally shrinks, and there is less money. The whole country, the whole people, the whole society, and all classes are experiencing a "virus pandemic" of credit crisis.
The economy is like a credit card with a super high limit, and I advise everyone not to take the amount lent by the bank as their natural property.
Disclaimer] The content of the article is for research and study purposes only and does not constitute any investment advice.