19 votes
Accepted

How does money vanish in the financial system?

I think you need to mentally separate money in the sense of actual currency from value (which is sometimes expressed in terms of units of currency). Value can vanish, or change. Money can't vanish (...
dwizum's user avatar
  • 17k
17 votes

What is the most effective saving money method?

In a word: budgeting. In order to have money left over at the end of the month, you need to be intentional about how you spend it. That is all a budget is: a plan for spending your money. Few ...
Ben Miller's user avatar
  • 116k
14 votes

What is digital money/currency?

Money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The ...
Dale M's user avatar
  • 3,200
8 votes

How does money vanish in the financial system?

It's "unrealized" value that vanishes. Nothing changes from a money supply standpoint. Joe buys a stock from Ben for 100 dollars, then the price crash to 20 dollars. Well Joe still have the 100 ...
D Stanley's user avatar
  • 135k
8 votes
Accepted

Do central banks really dispose of old currency the way it's shown in movies?

Yes. In the United States, the money is shredded at Federal Reserve banks: Currency Destruction The authorization to destroy currency was given to the Federal Reserve Banks by the Treasury Department ...
Michael A's user avatar
  • 1,958
8 votes

Who is buying all the debt?

Starting with your first question, why would anyone want to lend money at such a low interest rate?: Look at the loan as an investment Any investment has a risk/return profile. Getting higher returns ...
yoozer8's user avatar
  • 9,514
7 votes

What is digital money/currency?

Where else would you keep track of your money? MOST currency is digital these days, and somebody has to be the keeper of the records. Your employer doesn't hand you a bunch of cash on payday - they ...
RiverNet's user avatar
  • 5,380
7 votes

What is the most effective saving money method?

A technique that is working pretty well for me: Hide the money from myself: I have two bank accounts at different banks. Let's call them A and B. I asked my employer to send my salary into account A. ...
spickermann's user avatar
6 votes

Who is buying all the debt?

To a large extent, central banks. In order to stimulate economies, the central banks are lending out money at interest rates that are well below the rate of inflation. If you are a bank, and you can ...
Simon B's user avatar
  • 10.4k
5 votes
Accepted

M2 money supply

First remember that these are very broad factors and are not meant to be hyper-accurate. money like coins and change which never make it to the banking sector such as informal employment like ...
D Stanley's user avatar
  • 135k
5 votes

What is the technological problem that cryptocurrency solves? How does overcoming that technological problem help in the real world?

If you earn your money by selling drugs online or hacking computer systems for ransom money, cryptocurrency is a safer (but not 100 percent secure) way to get paid than other alternatives.
thieupepijn's user avatar
4 votes
Accepted

Does it make sense to save money in times of high inflation?

"Makes sense" is dependent on the available alternatives. Imagine that you are able to save $100 a year. If you have a 0% inflation rate, after a year you have $100 of "value". If you have a 100% ...
SJuan76's user avatar
  • 2,545
4 votes

What is the most effective saving money method?

Entire books have been written on how to get to the end of the month before you get to the end of the money. It's a very broad problem. But in your case, let me point out that your salary never "...
Kate Gregory's user avatar
  • 13.2k
4 votes

How does trade generate profits for all parties?

There's something called the "greater fool theory of economics", which sets forth the premise that the goal of investing or trading is to find someone who will pay you more for something than you paid ...
Daniel Anderson's user avatar
4 votes
Accepted

How has the Fed been reducing its balance sheet?

The balance sheet slightly increased recently, but the general trend has been toward smaller. You can see the balance sheet (and other great data) on the website for the St. Louis Federal Reserve: ...
Charles Fox's user avatar
  • 2,779
4 votes

Why there is more digital money than physical money?

There may be more eloquent answers that reference banking system (fractional reserves) and monetary policy, but pragmatically I would say because there doesn't need to be enough physical currency to ...
D Stanley's user avatar
  • 135k
4 votes

How does money vanish in the financial system?

For every buyer, there is a seller so the amount of money involved always remains the same. Money just changes hands, regardless of what happens to the price of the stock. The money supply remains the ...
Bob Baerker's user avatar
  • 76.4k
4 votes

Do central banks really dispose of old currency the way it's shown in movies?

Michael A's answer is great, but because the question asks about incineration, I wanted to add some historical information. Prior to the early 1980's, the Federal Reserve did, indeed, use incineration ...
Doug Deden's user avatar
  • 1,343
4 votes

Who is buying all the debt?

Those low interest rate home loans are tied in with the fixed income markets. In that context the question is not so much "how does my 30-year home loan have an interest rate lower than inflation&...
C8H10N4O2's user avatar
  • 1,406
3 votes

How does money vanish in the financial system?

For example Joe buys a stock from Ben for 100 dollars, then the price crash to 20 dollars. Well Ben still have the 100 dollars it is only Joe who lost 80. Before the transaction, Joe has $100, and ...
hobbs's user avatar
  • 951
3 votes

Does it make sense to save money in times of high inflation?

I'm afraid there is a misunderstanding on the OP: With high inflation money loses its value, but when inflation becomes small again, money just stops losing value, but it doesn't regain its previously ...
Pere's user avatar
  • 129
3 votes

What is the most effective saving money method?

A trick that works for some folks: "Pay yourself first." Have part of your paycheck put directly into an account that you promise yourself you won't touch except for some specific purpose (eg ...
keshlam's user avatar
  • 46.5k
3 votes

What is the technological problem that cryptocurrency solves? How does overcoming that technological problem help in the real world?

The other answer describes how bitcoin solves the technological problem of trustless payment. The real world applications are when this trust is absent. There are two main situations where this ...
Dave's user avatar
  • 823
2 votes

Would it be logical if interest rates for loans made by commercial banks would be paid partly (back) to citizens?

By your logic, if a loan of £100 is new money dilutes your purchasing power, then the repayment of £110 is a reduction of the money supply that increases your purchasing power. Indeed, ultimately the ...
Mark Perryman's user avatar
2 votes

What is the most effective saving money method?

First pay yourself. When you get salary, send some parts of that (for example 10%) to your saving account. Step by step you'll save nice money ;)
ami's user avatar
  • 131
2 votes

What systems are currently in place to keep track of US money supply?

In the US, The Treasury Department and The Federal Reserve (aka "The Fed") jointly act to control large parts of the money supply in a variety of ways, and thus keeps track of this and reports much of ...
BrianH's user avatar
  • 11.7k
2 votes

How much USD is there in total?

You are asking about the Money supply, this is a statistic kept by the US Federal reserve: M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository ...
mhoran_psprep's user avatar
2 votes

What is digital money/currency?

For a large corporation (and quite frankly even most businesses in general) it would be very impractical for them to maintain "I Owe You's" between them and all the businesses and customers ...
user1086516's user avatar
2 votes

How would stocks devalue if majority holders were to sell all their stock?

You could speculate about the size of the price change but it would be no more than an inaccurate guess. The buy side size and depth would be listed in the order book. That would be the starting ...
Bob Baerker's user avatar
  • 76.4k
2 votes

What is the technological problem that cryptocurrency solves? How does overcoming that technological problem help in the real world?

What is the technological problem that cryptocurrency solves? According to the abstract of Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto: A purely peer-to-peer version of ...
Flux's user avatar
  • 17k

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