The money can be created, as I indicated, and can be destroyed. I do not mean to burn banknotes. Merely to repay a loan is a destruction of the virtual money involving own debt. If I sign a promissory note and others used this promissory note as payment, the promissory note is money. If I cancel the debt of the promissory note, the promissory note ceases to exist, the money disappears from circulation. Both money existed in the time before my payment, the promissory note and my money, and when cancelled it ceases to exist the promissory note. Destruction of money.
Tag: bancs
The Money and money creation
MONEY AND MONEY CREATION (How to do)
Money in today's world is pretty confusing. It is not gold. It is not even a right to you receive gold. It is simply "buying power". Whether it is a paper-currency or a point in your bank account, what it represents is your purchasing power.
Why central banks are so obsessed by inflation. Its primary mission has become to get that the money in circulation remains reasonably its purchasing power. If there is high inflation, then the purchasing power of our money decreases rapidly and the money ceases to have value; and everyone is looking for an alternative, other currency, property, gold, whatever that were not loosing "purchasing power" in the market.