So my understanding is that the cash in circulation (inc. deposits) is only about $40T while the economy (inc. investments, derivatives, and cryptocurrencies) is about $1.3Q.
My question is …is it possible to ‘cash up’ the $1.3QT or is it ghost money? Are we in a virtual economy that would crash if we all cashed out?
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The world economy is mostly shared money, or loaned money, or to better explain it:
You place $1000 in the bank, the bank does not expect you to withdraw all of them, so they write $1000 on your account but do then loan i.e. $800 out of them to another person.
These moneys are now officially become $1800.
Other money do the bank invest in stocks, these monies do also multiply, divide and so on. Or in short, from your $1000 can there easily be people who have loaned, invested, sold, bought and so on for maybe $5000.
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