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<p>[QUOTE=&quot;InfleXion, post: 1454669, member: 29012&quot;]I&#039;m having a hard time wrapping my head around this one.</p><p><br /></p><p>It sounds like you&#039;re saying it&#039;s not possible for this process to expand the money supply since even if it were money created out of nothing it would only be replacing money that was essentially destroyed (disappeared). However, say there is a bank run, everyone takes their money out, how is that decreasing the money supply? The money is still out there being used, it&#039;s just not on that bank&#039;s balance sheet.</p><p><br /></p><p>Alternatively, if the money is not created out of thin air, and instead is coming from existing FDIC deposit funds then according to what you are describing that would actually create deflation since existing money is being used to fill the void of the disappeared money. Is my thought process making sense? I feel like I&#039;m missing something.[/QUOTE]</p><p><br /></p>

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