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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Bid Buster who wrote (207266)11/29/2002 12:08:06 PM
From: Jorj X Mckie  Read Replies (1) of 436258
 
When someone takes out a loan, money is created.
When someone defaults on a loan, money is destroyed.

If you have a bunch of people/businesses/countries defaulting on loans at a greater rate than money is being created (by new loans being taken out), you would have deflationary pressure.
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