We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Why saving makes you poor
Comments
-
It's not accurate to say it is immediately worth 1/9th of what it was before (we're not in Zimbabwe). However, he is correct that by depositing £100 in the bank, you are enabling the bank to lend £900 to other customers. Given that only £100 of services have been 'earned' but there is now £1000 in circulation, the £100 that you can spend (incidentally causing this hypothetical bank with only one depositor to collapse) will buy you less than it would before.
OTOH, the other 9 people who borrowed (say) £100 each, can now spend your money. And the bank, which originally owed you £100, is now owed £800.
Ok there can be a time lag as the not all money is not immediatly withdrawn and spent by everyone else on the same item you want.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.5K Banking & Borrowing
- 254.1K Reduce Debt & Boost Income
- 455K Spending & Discounts
- 246.6K Work, Benefits & Business
- 602.9K Mortgages, Homes & Bills
- 178.1K Life & Family
- 260.6K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards