Where has all the money in the world gone? →

otherwiseyep:

Now, what happens if another wildfire hits your orchard? Those twelve loddars are destroyed, they are gone, the shoe-maker is twelve loddars poorer, without spending it and without anyone else getting twelve loddars richer.
The money that bought your deer and my shoes has simply vanished from the economy, as though it never existed, despite the fact that it bought stuff with genuine economic utility and value.

Reddit user otherwiseyep explains in great details and easy to understand how the monetary and financial system works.

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