If you buy the S&P500 then someone else sold the S&P500 for the same amount of m... | Hacker News

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jandrewrogers on March 22, 2024 | parent | context | favorite | on: Why the 2% inflation target? (2023)

If you buy the S&P500 then someone else sold the S&P500 for the same amount of money. The cash doesn't disappear, it just moves to a different person who presumably sold the S&P500 because they need cash to spend it.

That is quite different than sitting on cash.

TehShrike on March 22, 2024 [–]

How is it significantly different than what happens when banks invest money that is left in checking/savings accounts?

vkou on March 23, 2024 | [–]

In a deflationary economy, banks offer negative interest rates.

You don't put your money in a savings account (which are lent out) in one, you put it into a vault.

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