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by koakuma-chan 193 days ago
What does "wipe out" mean? Money doesn't disappear when someone sells.
2 comments

First, wealth and money are not the same. If you live in a mansion, but your bank account is zero, you can be wealthy and money-poor at the same time.

Money isn't some fixed object, like the amount of bills in circulation. It's the gross valuation of all sales, whether you trade a dollar bill or swipe a debit card or take out a small loan with a credit card tap.

And money can disappear, if something valued at $10 only sells for $9.

Not sure, but one example I can think of is gov bailout, if the gov just prints the money and the asset becomes worthless.
Government printing bills has literally nothing to do with the amount of wealth in the world. They don't use those physical objects to pay government debts, nor do they dole them out to stranger or "friends".

The government can generate money in the short term by changing lending rates ("the Prime"), which allows you to buy more for less interest, which encourages purchases. The long-term effect includes paying off that interest, of course, and someone still has to want to loan money at that rate; if the Prime went to zero your credit card rates still wouldn't be zero.