During dinner today, my sister posed a question to me regarding the flow of money and the change of hands between money.
Let’s assuming in this world we have $X amount of money printed and available. When money changes hands (for e.g Supplier sells meat to Supermarket which in turn sells it to restaurant which in turn sells the same to consumers), does this mean that the amount of money in this world remains as $X? In this simple scenario, money changes hands and nothing is lost (i.e the amount of money in this world remains $X). The question is, if money only changes hands, why are we now facing with a lot of money uncertainty such as debt crisis for example. If Europe has no money, does this mean interchangeably that the money actually “flows” to other nations or other people?
Where do money goes in the end?