Understanding Money Supply

JIFU has amplified into a disruptive force in four different but interrelated sectors of the economy. Economics can be confusing, but the basics are vastly important to anyone trying to run a successful business and capitalize economic patterns.

Money supply is an elementary concept, but can also be complex and perplexing. Today, we break down what the money supply is and how it affects the economy.

In simple terms, the money supply is all fiat money (legal tender by a government) in circulation. This includes cash, coins, and balances in bank accounts but does not include physical assets, long term investments, or various forms of credit.

As a rule, generally an increase in the money supply typically lowers interest rates which means people are more likely to invest and spend, leading to a stimulation in spending. In return, businesses order more raw materials and produce more to satisfy the increasing market demand. Additionally, these businesses will need to hire more workers which raises the demand for labor.

On the other hand, if there is a decrease in money supply, the opposite will occur. This means people are less likely to spend and invest, businesses cut back on production and the demand for labor goes down. As you can clearly see, the money supply affects the economy in a massive way.

While this is the general relationship between the economy and the money supply, economists have noticed that the correlation has been increasingly unsteady. Because of this, the money supply is not nearly as important as it once was in governments creating their monetary policies.

Part of this also may have something to do with the increasing usability and value of cryptocurrency. Cryptocurrency is not a tender that requires legitimization through a government entity or a banking institution. This means that, while people are using it as a trading tool, it is not being factored into the money supply. However, each crypto currency has its own “money supply,” and the very fact that it is so unique and disruptive is what makes it more accessible and attractive to entrepreneurs.

JIFUshop and JIFUcoin aim to be massive contributors to fiat money supply circulation and crypto currency circulation. Each one is connected and works together to propel you into the economy of the future.