Posted: Feb 10, 2017 1:22 pm
The main reasons that lenders don't end up with all of society's money.
1. The money supply is not fixed. It grows with economic activity.
2. Changes in consumption vs saving will impact the amount of money available in the economy and who has ownership of it.
3. Lenders can and do sustain losses, sometimes very large losses which results in a transfer of wealth from creditors to debtors.
4. Profits from lending can be redistributed in the form of dividends.
There are other reasons but the above are the most obvious.
1. The money supply is not fixed. It grows with economic activity.
2. Changes in consumption vs saving will impact the amount of money available in the economy and who has ownership of it.
3. Lenders can and do sustain losses, sometimes very large losses which results in a transfer of wealth from creditors to debtors.
4. Profits from lending can be redistributed in the form of dividends.
There are other reasons but the above are the most obvious.