Money gets created in the USD economy all the time, whether by invented debt, cash printing, or the issuance of bonds. Does that money actually represent wealth? Does the USD economy actually contribute anything of value?
So let’s say you wanted to permanently remove value from the USD economy for some reason. What’s the most effective and impactful way to “burn money?” Not spend it. Not acquire it. Destroy it, with the goal of taking that value out of the economy.
Burning/ shredding physical cash seems really inefficient. Maybe the answer lies in devaluing real estate?
This is all hypothetical so assume whatever resources or labor you want.
Yeah, thats the way it ought to be, its actually slightly different, and is very important in the context of what a country does to undermine it’s own currency, or even a companies director does to the value of their company.
Value is a question of perception. How much are people/investors willing to tolerate and still perceive the value in a good or service or currency.
Its the reason the massive quantitative easing ended up spreading so widely as a tool in the last 15 years. In the beginning it was assumed that the massive ‘money printing’ would lead to massive devaluations, which didn’t really happen as expected. Thats because the reaction in value percieptions in those currencies ended being more flexible than central bankers and economists initially feared.
The perception of value played a role in how long it took for people in the US to recognise the real estate bubble exploding in 07-08. It plays a role in really any bubble, and is why prices drastically plummet instead of taper. The value perception changes en masse, and bang, everybody runs for the door.
One more interesting example is the value perception comparison of essential workers in the COVID19 Pandemic compared to normal times.