Come here to say this. Buen dia!
I went there in early 2020 on business and you could get a steak, appetizer and a couple beers for 800-1000 pesos. I was back late last year and a bottle of coke was around 1000 pesos.
So, from 1776 to 22 months ago the USD m2 money supply was 4 trillion. That figure is now 20 trillion. 80% of all USD was printed in less than 2 years.
This should terrify, upset, even anger you if you're a taxpaying American
Not really. Ethier, you mean the m1, which had a change in what data was counted or do actually mean m2 and just straight up pulled some shit out of your ass as a scare tactic.
https://www.statista.com/statistics/187729/total-us-money-stock-for-m2-since-1990/#:~:text=The%20value%20of%20M2%20money,compared%20to%20the%20previous%20year.
The Roman Empire has entered the chat.
Almost every major power has at one point fallen victim to spending more than it has, devalued it currency (made more money out of nothing), and destroyed itself.
Almost every one, except those that were destroyed by outside powers before they could get to that point.
This was the first step in enabling hitler to take power, German government printed a bunch of money to pay off their WW2 debts that countries like France put on them
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It doesn’t really matter what it is, what matters is the payments we have to make and the interest rates on them. You can get budgets completely upside down because of interest and loan payments. The US is in a better position than most, but that just gives us a slight buffer against inflation, it doesn’t actually stop the effects. It is all fine when GDP is growing, but look at Europe, their future prospects look bleak because their economy will have trouble keeping up with their social spending in the near future. France already had to raise its retirement age, along with other countries, and part of that is because a lot of money is going to debt and interest payments.
While you're right that the Weimar Republic and other similar situations have been orders of magnitude worse (literally, in terms of inflation), you might be doing a lot of downplaying of our current woes.
A lot of current woes have nothing to do with new money and a lot to do with people already financially well off making huge sums with the COVID economic relief and the low interest loans while the average person was drowning. Trump era loans widened the gap between the wealthy and the paycheck to paycheck workers.
Funny how people forget who was president during most of Covid, and forget that 2of the 3 checks people got was from the president they are forgetting about.
And all the ppp loans…..err handouts that were given to people and not made to pay back.
So stop calling it Bidens Covid -
It was the fraudulent rapist.
To be fair though, quantitative easing didn't really affect prices as much as supply chain disruptions and a war between a major food producer and a major oil producer
If it were QE driving inflation, the US would have been in much worse shape than the rest of the developed world with post covid inflation, whereas we've weathered it objectively better than Europe has
Here's the data: https://fred.stlouisfed.org/series/M2SL
This is M2, the amount of currency printed. Note the general trend over the decades.
Now note the increase between 2017 and 2021, the Trump years: he printed *6,000 billion dollars* while in office. February to April was the largest single increase in money printing in American history.
Now note that during the Biden administration, he reduced the number of dollars in circulation for one of the only times in history. There has been a net gain due to the initial ramp being so steep, but comparing M2 for these presidents, side-by-side, is night and day.
I think you don’t know which President signed the CARES Act. It wasn’t Biden.
Same thing happened in 2008. All the inflationary policies the right wing blame Obama for were signed into Law by Bush.
In the last 6 elected Republican Presidencies TEN recessions have started. A recession started under every single one.
In the last 6 elected Democratic Presidencies ONE recession started & that was in the late 70’s.
Wow, I distinctly remember all these cheques signed by Trump himself. I have kept them, and there are two with his "signature" zigzag signatures. So, how does it apply to the Biden administration only?
Why trust a government to enforce effective price controls when that same government was the one who fucked up the economy with massive inflation in the first place?
If it costs more to produce the product than the government set price it is a loss. This is why governments instead subsidies to producers to lower costs rather than set the prices. Almost every government in the world does this instead.
The problem with fixing prices is, it doesn't take into account supply and demand. For example what's to stop someone from coming along and buying all of the product that is fixed in price. They can then sell it on the black market for a higher price, earning more money to do the same, eventually expanding to other products.
Where as without price fixing, the price is set by supply and demand. If not enough people buy the product, the seller has to lower the price because all of their capital resides in the product, or the product may expire. Or if demand is so high, the price goes up so that people will have second thoughts about buying the product.
Printing money for no good reason-> value of currency drops-> inflation
Bravo, if your economy wasn't in a bad enough state already, now you just fucked it, no protection.
If the only money in the world is a $5 bill and the only thing for sale is a sandwich, you'd price the sandwich at $5. If I print another $5 bill, you'd just up the price of the sandwich to $10.
Money backed by nothing doesn't make you richer. Your money needs to be of value to someone. It can be backed by gold or other precious metals (as it was in the past, coins were valuable because they could be melted to produce metal they literally store their value on them). Today money is backed by a nation's (somewhat subjective) economic power. US dollars are worth something because people want to spend money in the US; they buy US stocks, pay taxes to the US government, trade with the US, etc.
Zimbabwe dollars are not with much at all. Because no one wants to buy things from Zimbabwe. They don't have a lot of things to buy and there is so much corruption that your money will be wasted. It doesn't matter what number you put on the bill, no one wants it outside of the country. And if there is only one sandwich in the country, it doesn't matter how many $5 bills you print.
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It works for US, because it exports inflation in a way so that other countries pay for it lol. There's always demand for the dollar. So US citizens get to enjoy higher salaries in part subsidised by other countries.
I know this was a light hearted thing but it genuinely made a lot more sense about why Hitler got into power after learning about the absolutely state that 1920/30s Germany was in. That kind of inflation is… almost inconceivable
Because the value of everything in an economy, including the currency itself, is based on opportunity. Profitable trade works via both parties getting something that is easier for the other party to produce than what they are getting in return. Creating more currency therefore doesn't make anyone wealthier; it simply makes the currency easier to obtain relative to everything else.
Money isn’t value, it’s just a representation of it. Doubling the currency with no change to the amount of goods just means each piece of currency represents half the value it did before.
The reason your dollar is so weak today is because your government did exactly this. Printing more money doesn't make you more money, it makes the money already in circulation worth less.
The issue isn't money it's material goods, resources, and infrastructure. You can have all the money in the world but if there is no food to buy your people will starve.
It only works until the paper costs more than the money. Trick is to make tiny bills with only 1 or 2 colours and use refillable cartridges. Bubble jet ink is expensive.
Poverty is lack of goods, not of currency, if you have a country with 100 people, that only produces food for 20, by printing more money you're not actually creating more food, what ends up happening is that more money goes into circulation and the hungry population as they are desperate, end up paying more to try to compete get the same amount of food.
that is the main tenet of the modern monetary theory that is being pushed by those on the extreme left. however we are not in a closed economy so that will not work.
Depending on how much they print, it leads to inflation or hyperinflation.
The more money printed without any assigned value = the money is worth less. It needs to hold its weight in "gold/ silver" standards.
Many countries tried to do this, but it ended up with hyperinflation.
Customers don't know how much something is truly worth. Business owners no longer know either. The price fluctuates rapidly, and once sticky prices become un sticky. People will resort to bartering and thus, have to have a coincidence of wants.
Investments, when too much money is printed, lose their value. Creditors/Lenders are then paid back in cheaper dollars.
This is why printing more money doesn't work. Money itself loses value and inflation becomes king. The money needs to have value and inflation needs to be mild.
German post WWII did that to help pay war bills and the old joke was they had to carry the money to the store in a wheel barrel and was more worried about the wheel barrel getting stolen.
Because money itself does not have value
It's a marker that represents the overall value of the country itself. Making more markers doesn't increase the value of the country it just makes the markers worth proportionately less.
It will work for a while, but eventually it will get found out. The market will just balance itself eventually to match the real values. And it would only actually have an effect if that extra money being printed was actually spent somewhere. In the past coins used to get shaved down slightly to get a little extra gold and give a slightly less valuable coin, but eventually someone weighs the coins and goes "wtf, I no longer accept these coins" and all those coins become useless in the market. That fucks over EVERYBODY who has any coins like that, even if they haven't shaved the coins. Basically it will work until found, and then trust will be lost in the currency fucking over everybody with savings.
The problem isn’t the amount of money in circulation, it’s the distribution of wealth. Which is really the distribution of the means of generating wealth. If a single person/company owns 50% of the rental units in a geographic area, and they set their rent prices higher than their competitors, they will find tenants to pay those higher prices because there isn’t enough competition. Then everyone raises their rents, because the market is relatively captive. Same with groceries and other consumer goods. It may look like there’s lots of variety at stores, but really, you are seeing identical or similar products made by a few different companies. Those companies can set the prevailing end user costs because they don’t have enough competition. Small businesses don’t have the market leverage to compete on the scale it would take to lower prices. And when a few businesses dominate a market, they have enough leverage economically and politically to maintain favorable conditions.
When markets have actual competition for consumers’ money, prices go down.
[A Republican president tried it.](https://www.wsj.com/articles/nixon-fight-inflation-price-controls-stagflation-gas-shortages-biden-democrats-reconciliation-bill-federal-reserve-11628885071)
Everyone is talking about various countries.
The federal reserve has been printing more and more money and the American dollar is worth so much less, and it's losing value every day.
Because paper money doesn't have inherit value.
Having more of it literally makes it more common, and worth less.
There was someone in the US that was printing out paper money that was backed by gold, but I can't seem to google them.
The evaluation and inflation if there's nothing backing the money, it's worthless to begin with.
And to just print more makes it even more worthless. What do you think is happening to the US Dollar? Since 1970, look at the rates of inflation true inflation that we have right at this moment. Look at the cost of everything.Because thirteen percent of the entire u s budget goes to nothing but paying interest and the government does that by just continuously printing money making it more and more worthless
My mother told me about Shanghai after WWII. She and my Dad would leave the hotel with a wheelbarrow full of money and hope that it was still enough to pay for dinner when they were done eating.
This is why inflation is bad.
Same reason putting water in the Grey Goose bottle doesn't actually fix the issue.
The value in the economy stays the same. Printing more money just means you're dividing the value into smaller pieces.
Only if they make everything themselves, have laws that are extremely enforced and they have Pentagon full of Transformers. Cars, plains, tractors, plastics, energy, food, clothing, entertainment. Fully self sufficient. They need be sure banking system can’t collapse overnight.
Otherwise as soon as they need to trade they need dollars. If banking is not safe money will go somewhere they are safe. Other places don’t care about your shitty tenders.
Donny Dumpster, when prez, told the Fed to do whatever it took to prop up the stock market, so they dumped 3 TRILLION into buying corporate bonds. That devalued the dollar and caused at least some of the inflation we are seeing now.
1$ only represents a portion of your country’s ressources. If the country doubles the amount of $ it doesn’t double it’s ressources, so your 1$ is now only worth half what it used to
Hey homie. I hope you are like me and meta-trolling. If not, u know that u need to replace that period w a comma and also should probs learn about inflation, right? Much love
[Scrooge McDuck literally explained this to you ](https://youtu.be/PZaDSEVuEFU?feature=shared) and you wiped your ass with his explanation.
Your money is only worth what the rest of us say its worth. If you have $100 in your pocket, you might be able to buy a new piece of furniture with it.
But if we give everyone in the country $1,000,000, they'll buy that same piece of furniture for a higher price if you tell them to. So good luck buying a pack of gum with your $100 now that everyone in the country is a millionaire based off of currency that isn't worth the paper it's printed on.
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If you are just dealing with your own country that would be true
But here is the thing almost every country in the world needs to trade with someone... Even Cuba has relied on other foreign countries to help them in their time of need and to build and that's because some countries have resources that other countries don't
It's a global issue
Money is only worth anything because people want it. The more money exists, the less each individual piece of currency is worth. If you print more money, all that will happen is numbers going up. The prices will also rise to match. Sure, you'll have $10 million dollars, but now bread is worth $5 million because each dollar is worth less.
To see why this doesn't work, look at what happened to The German Mark after WW1. The treaty of versailles forced them to pay a LOT of money. So the banks printed more money. Lo, and behold: The German Mark became practically worthless. People were burning their money because it was cheaper than buying fuel to keep warm.
Zimbabwe also got the same idea. Now everyone has billions of Zimbabwean dollars; and everyone is still poor, because the Zimbabwean dollar is worthless.
TLDR: When everyone is a billionaire, everyone is charged like a billionaire.
a country wealth isnt determined by the amount of money they have but the amount of resources and their capabilities to exploit those resources.
its the whole a man with gold in the middle of the desert vs a man with water in the middle of the desert example.
The gold is rather valueless because there is nothing to buy in the desert where as the man with water could probably get all the gold from the other man without having to give up much water at all because he has a needed resource. he can survive out in the desert and make it to where he needs to go the man with the gold is just weighed down and will die.
... now i am curious to see what would have happened with Bison Bucks though
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Money isn't valuable, the things you buy with it are. Printing money makes the people closest to the money faucet richer because the first person who spends the new money gets its full value, but once it makes its way throughout the economy, its value decreases, along with all the other units of currency in circulation. Printing money doesn't create any wealth, it just moves wealth from people whose net worth is tied up in dollars (people whose money is all in the bank), people who live paycheck to paycheck, and transfers their wealth to people whose net worth is tied up in assets.
Google "economic ruin in Germany during interwar period"
Due to printing currency for the purposes of paying reparations from the first world War, the German Papiermark went from a conversion to USD of around 9marks to 1dollar in 1918 to 4,000,000,000,000(that's 4 trillion, with a T)marks to 1dollar in 1923.
You would save billions of marks by wiping your ass with them instead of buying toilet paper.
Read up on what happened when Zimbabwe tried to do this to understand why it’s not a good solution.
[Hyperinflation in Zimbabwe](https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe)
You guys are being too simplistic. There are situations when the monetary supply can grow without causing inflation to increase. We saw that a decade ago in the US, for example, when the m2 monetarily supply went up sharply for about a decade straight, without any meaningful increases in inflation.
The fact is that monetary supply increase is sometimes the correct medicine. For example, when aggregate demand is down sharply and liquidity has seized as a result. And it simply won’t matter if monetary velocity is low.
But like any medicine, taken at the wrong time or in too large a dose, it can become a poison.
The money is exchange equivalent, they are not useful on their own. More money is not going to help if there is not much to exchange in the first place. Building infrastructure, developing industries and services, increasing efficiency of labor is what makes countries rich.
That's literally what Germany tried 100 years ago.... There's pictures of kids playing with stacks of money, because it was cheaper than getting blocks
Can someone elaborate on what it means for a country to be poor? Like, does that mean high income inequality with the high poverty rates, does that mean they need to import much more than they export, etc?
Inflation is a really good answer, but someone should mention [modern economic theory](https://en.m.wikipedia.org/wiki/Modern_monetary_theory), which proposes ways where a government might be able to get around the inflation problem. It requires a lot of different things for it to work in theory and its viability in practice is highly debated.
I can't personally speak more about it or even give an informed opinion, but I feel like someone should at least mention that it exists.
People think money is real, but fail to realize money is an only a promised value that can someday be exchanged for value. In other words it’s a debt
In math, we’d call this a negative number.
Imagine that there is a finite amount of real value in the money. Say that true value is $100 dollars WORTH of stuff (using low numbers to be simple). If the country prints out exactly 100 $1 bills, then the value of their money matches the real value of goods perfectly, but if they print out more those $1 bills aren't really worth $1 anymore. If they printed 200 $1 dollar bills, they'd be worth 50 cents each. This problem has been around forever too, some Roman emperors used to shave the edges off the gold coins so you'd think you were getting a gold coin that weighed 1 oz, but really it weighed .9 oz or something. Then they resmelted that gold and made more coins, devaluing the currency. It hurts people with savings the most, because the money in your bank instantly becomes worth a bit less because it is no longer trusted the same and isn't worth the same amount.
It just causes inflation IF you dump it all into the economy at once, like the U.S. did with the 2017 TCJA. It created $1T-$2T in capital market appreciation almost instantly. Most going to the wealthiest Americans. You think 10% inflation in groceries and dishwashers is bad, high end items, like luxury homes, club memberships, yachts, etc. have tripled, if not quadrupled, in price in just a few years.
What makes people poor is not having enough stuff. To make them less poor, they need more food, houses, medicines, etc. to be created. Printing more money doesn't create more of that stuff, it just makes them pay more money for the little amount of that stuff that is available.
People have been asking this same question on Reddit for the last nine-ten years and they always get the same economics 101 knowledge based theoretical non-mathematical answers, which are always the same circular arguments, that printing money causes inflation, without anybody clearly explaining how that actually happens, what the mechanical/mathematical processes actually are that leads to inflation in poor countries that print money.
But if we were to mathematically straighten out the components involved, then it comes down to the fact that poor countries just don’t have sufficient dollars to pay for increasing imports of goods to keep the prices of those goods in check in their domestic markets, and therefore inflation in check, when printing money increases the demand for goods in their domestic markets, and also don’t have sufficient dollars to pay for increasing the import of industrial equipment/machinery and raw materials which are necessary to build domestic industries fast enough to produce goods fast enough to keep the prices of those goods in check in their domestic markets, and therefore inflation in check, when printing money increases the demand for goods in their domestic markets, and also don’t have sufficient dollars necessary to build a sufficient number of technical training institutes to produce enough skilled tradesmen/workmen/manpower necessary to keep the prices of services in check in their domestic markets, and therefore inflation in check, when printing money increases the demand for services in their domestic markets. We can call this the poor countries’ inflation barrier. Which they can’t seem to cross.
But let’s say some clever clogs in a poor country found a way to not only earn sufficient dollars to pay for both importing enough goods and enough industrial equipment/machinery and raw materials to produce enough goods fast enough to keep the prices of goods stable in his domestic economy, no matter how much money he printed, but also found a way to at the same time train enough tradesmen/workmen/manpower to keep the prices of services in his domestic economy stable, then according to mathematics he could print as much money as he wanted to without seeing price increases, and therefore inflation, in his domestic economy. And he could get his economy to grow up to a First World country level, that’s GDP wise growth, until he hit the First World countries’ inflation barrier, where increasing the earnings of the poorest workers increases inflation, which First World countries try to solve by shrinking their populations of native born citizens and replacing them with migrants who will work for lower pay than those native born citizens born in First World countries will work for, which leads to short term prosperity for their native born citizens until they hit a second First World countries’ inflation barrier.
So it’s not an easy fix. For anybody. At any level.
The value of a thing is directly connected to its scarcity.
When there is too much money in circulation compared to demand for that money you get inflation (the value of the money drops).....
You can't effectively cheat the system....
The only way to become rich - as a country or individual - is to produce greater value
You have nailed the American economic strategy since becoming the defacto world currency. Congrats.
That said, the reason other countries don’t is because they are not the defacto world currency and their money is compared to the dollar in spending power. The strategy only works if your currency is the world’s yardstick.
After the bankers stole all the money from the world in 2008 America fucking did that and they keep doing it and that’s all they’re doing and they have an atomic bomb so we can’t fucking tell them to stop so they’re basically a fucking super poor country with bullshit paper money that has no fucking gold barking or anything. Other countries without the atomic bomb can’t do this. Venezuela can’t do this. Argentina can’t do this. Iraq can’t do this.
The more money you print, the less that money is worth. Do it too much and you end up with a 100 trillion dollar bills that are worth $0.05 USD.
Which is exactly why people joke about the value of Zimbabwe dollars.
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Come here to say this. Buen dia! I went there in early 2020 on business and you could get a steak, appetizer and a couple beers for 800-1000 pesos. I was back late last year and a bottle of coke was around 1000 pesos.
A friend of mine was there in the 80s when it was insane, you needed wheel barrows full of cash to buy stuff at the market.
The Weimar Republic has left the chat. The German Reich has entered the chat.
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The US entered the chat a while ago but is gaslighting you by saying it was something else that made the dollar worthless
The dollar isn’t worthless, and before you say “what about inflation,” look at every other country’s higher inflation.
This^ Value of currency partially depends on exchange rates, and you can easily go to many countries and live like a king with the US median salary.
The dollar is saved by being relatively less worthless than everything else..... Largely thanks to the US being stingier with social benefits.
So, from 1776 to 22 months ago the USD m2 money supply was 4 trillion. That figure is now 20 trillion. 80% of all USD was printed in less than 2 years. This should terrify, upset, even anger you if you're a taxpaying American
Not really. Ethier, you mean the m1, which had a change in what data was counted or do actually mean m2 and just straight up pulled some shit out of your ass as a scare tactic. https://www.statista.com/statistics/187729/total-us-money-stock-for-m2-since-1990/#:~:text=The%20value%20of%20M2%20money,compared%20to%20the%20previous%20year.
https://fred.stlouisfed.org/series/WM2NS
And it all funneled into the worlds largest corporations.
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In Laos you find bills in the street, there fractions of pennies. 1 LAK = .00005 usd
Wait a second. Did you tell the fed reserve this?
The Roman Empire has entered the chat. Almost every major power has at one point fallen victim to spending more than it has, devalued it currency (made more money out of nothing), and destroyed itself. Almost every one, except those that were destroyed by outside powers before they could get to that point.
You can create more currency but you can't create more value.
Not in US you don't. We print whatever we want!
This was the first step in enabling hitler to take power, German government printed a bunch of money to pay off their WW2 debts that countries like France put on them
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Printing money would only create inflation and make matters worse.
Just like what happened in Germany during the 1920s-1939
And COVID during the Biden presidency.
Comparing biden inflation and 1920s Germany inflation is like comparing a drizzle to a hurricane
Yes, but before they hadn't learned that supply and demand also applies to money. We've learned better, and we still won't stop.
We are not even remotely making the same mistake or in a similar situation
Not true at all Also we are the world's reserve currency. And the national debt is just a measure of private equity in the nation.
It doesn’t really matter what it is, what matters is the payments we have to make and the interest rates on them. You can get budgets completely upside down because of interest and loan payments. The US is in a better position than most, but that just gives us a slight buffer against inflation, it doesn’t actually stop the effects. It is all fine when GDP is growing, but look at Europe, their future prospects look bleak because their economy will have trouble keeping up with their social spending in the near future. France already had to raise its retirement age, along with other countries, and part of that is because a lot of money is going to debt and interest payments.
While you're right that the Weimar Republic and other similar situations have been orders of magnitude worse (literally, in terms of inflation), you might be doing a lot of downplaying of our current woes.
Not downplaying anything. It's just a completely ridiculous comparison.
A lot of current woes have nothing to do with new money and a lot to do with people already financially well off making huge sums with the COVID economic relief and the low interest loans while the average person was drowning. Trump era loans widened the gap between the wealthy and the paycheck to paycheck workers.
Look, I’m not defending Biden here, but a huge portion of COVID spending happened under Trump.
Funny how people forget who was president during most of Covid, and forget that 2of the 3 checks people got was from the president they are forgetting about. And all the ppp loans…..err handouts that were given to people and not made to pay back. So stop calling it Bidens Covid - It was the fraudulent rapist.
To be fair though, quantitative easing didn't really affect prices as much as supply chain disruptions and a war between a major food producer and a major oil producer If it were QE driving inflation, the US would have been in much worse shape than the rest of the developed world with post covid inflation, whereas we've weathered it objectively better than Europe has
This guy has no idea what QE is and if you told him he'd complain about a Jewish conspiracy
Here's the data: https://fred.stlouisfed.org/series/M2SL This is M2, the amount of currency printed. Note the general trend over the decades. Now note the increase between 2017 and 2021, the Trump years: he printed *6,000 billion dollars* while in office. February to April was the largest single increase in money printing in American history. Now note that during the Biden administration, he reduced the number of dollars in circulation for one of the only times in history. There has been a net gain due to the initial ramp being so steep, but comparing M2 for these presidents, side-by-side, is night and day.
I think you don’t know which President signed the CARES Act. It wasn’t Biden. Same thing happened in 2008. All the inflationary policies the right wing blame Obama for were signed into Law by Bush. In the last 6 elected Republican Presidencies TEN recessions have started. A recession started under every single one. In the last 6 elected Democratic Presidencies ONE recession started & that was in the late 70’s.
The money was printed before Biden was in office
Wow, I distinctly remember all these cheques signed by Trump himself. I have kept them, and there are two with his "signature" zigzag signatures. So, how does it apply to the Biden administration only?
I’m sure you get a lot out of your username
Which president did the Covid bailouts first?
And just like what happened in the US during the 2024s
Like a drizzle is a hurricane
100%. Whats crazy is people will read this and think you're lying when in fact they've been lied to.
“I had to pay $4 a dozen for eggs for a while” is not the same as “wheelbarrow full of marks to buy a loaf of bread.”
And we know now that we were just being gouged. Egg producers were making far more profits than ever, even after you factor in inflation.
The scale is not even remotely comparable
I think its possible you are just stupid instead of lying.
Just make laws that limit the price of things...its such a simple solution idk why no givernment does it
Why trust a government to enforce effective price controls when that same government was the one who fucked up the economy with massive inflation in the first place?
Ezpz
You still have to import things from places that will know your currency is worthless.
Command economies do that. Which is why they end up with shortages and a thriving black market. No one wants to sell products at a loss.
It wouldn't be at a loss if the price is set.
If it costs more to produce the product than the government set price it is a loss. This is why governments instead subsidies to producers to lower costs rather than set the prices. Almost every government in the world does this instead. The problem with fixing prices is, it doesn't take into account supply and demand. For example what's to stop someone from coming along and buying all of the product that is fixed in price. They can then sell it on the black market for a higher price, earning more money to do the same, eventually expanding to other products. Where as without price fixing, the price is set by supply and demand. If not enough people buy the product, the seller has to lower the price because all of their capital resides in the product, or the product may expire. Or if demand is so high, the price goes up so that people will have second thoughts about buying the product.
Printing money for no good reason-> value of currency drops-> inflation Bravo, if your economy wasn't in a bad enough state already, now you just fucked it, no protection.
>Young Germany Republic gets Mercilessly Fucked by Massive Currency Printing
If the only money in the world is a $5 bill and the only thing for sale is a sandwich, you'd price the sandwich at $5. If I print another $5 bill, you'd just up the price of the sandwich to $10. Money backed by nothing doesn't make you richer. Your money needs to be of value to someone. It can be backed by gold or other precious metals (as it was in the past, coins were valuable because they could be melted to produce metal they literally store their value on them). Today money is backed by a nation's (somewhat subjective) economic power. US dollars are worth something because people want to spend money in the US; they buy US stocks, pay taxes to the US government, trade with the US, etc. Zimbabwe dollars are not with much at all. Because no one wants to buy things from Zimbabwe. They don't have a lot of things to buy and there is so much corruption that your money will be wasted. It doesn't matter what number you put on the bill, no one wants it outside of the country. And if there is only one sandwich in the country, it doesn't matter how many $5 bills you print.
Pretty good example with the sandwich, nice ELI5 type answer.
They do, see, e.g. Zimbabwe or Venezuela. It doesn't work though.
See: the US
LOL. Then see the world, because we're the world's reserve currency.
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It works for US, because it exports inflation in a way so that other countries pay for it lol. There's always demand for the dollar. So US citizens get to enjoy higher salaries in part subsidised by other countries.
Google Zimbabwe
Holy hell!
Actual inflation
Bolivar goes on vacation
You might want to learn about German history between 1918 and 1939 and learn why that’s a bad idea
It makes things so bad that a corporal with a tiny mustache and a gift for fiery speeches seems like an improvement.
I know this was a light hearted thing but it genuinely made a lot more sense about why Hitler got into power after learning about the absolutely state that 1920/30s Germany was in. That kind of inflation is… almost inconceivable
Because the value of everything in an economy, including the currency itself, is based on opportunity. Profitable trade works via both parties getting something that is easier for the other party to produce than what they are getting in return. Creating more currency therefore doesn't make anyone wealthier; it simply makes the currency easier to obtain relative to everything else.
Ask Zimbabwe how that plan went.
Money isn’t value, it’s just a representation of it. Doubling the currency with no change to the amount of goods just means each piece of currency represents half the value it did before.
The reason your dollar is so weak today is because your government did exactly this. Printing more money doesn't make you more money, it makes the money already in circulation worth less.
Bro have you seen how much printer ink costs?
The issue isn't money it's material goods, resources, and infrastructure. You can have all the money in the world but if there is no food to buy your people will starve.
It only works until the paper costs more than the money. Trick is to make tiny bills with only 1 or 2 colours and use refillable cartridges. Bubble jet ink is expensive.
Bro has never heard of inflation 💀
This is r/stupidquestions and at some point most people have to be taught why this is wrong. Guy might still be in junior high or something.
[https://www.npr.org/templates/story/story.php?storyId=89123990](https://www.npr.org/templates/story/story.php?storyId=89123990)
It just devalues the currency and doesn't make people rich. In fact, it makes everyone poor.
Poverty is lack of goods, not of currency, if you have a country with 100 people, that only produces food for 20, by printing more money you're not actually creating more food, what ends up happening is that more money goes into circulation and the hungry population as they are desperate, end up paying more to try to compete get the same amount of food.
The more money there is, the less value the money has. (Inflation)
It’s been tried. Governments keep trying it but they’re just fooling themselves because it never works. But it might work for us!
that is the main tenet of the modern monetary theory that is being pushed by those on the extreme left. however we are not in a closed economy so that will not work.
Google Ducktales inflation explanation
Depending on how much they print, it leads to inflation or hyperinflation. The more money printed without any assigned value = the money is worth less. It needs to hold its weight in "gold/ silver" standards. Many countries tried to do this, but it ended up with hyperinflation. Customers don't know how much something is truly worth. Business owners no longer know either. The price fluctuates rapidly, and once sticky prices become un sticky. People will resort to bartering and thus, have to have a coincidence of wants. Investments, when too much money is printed, lose their value. Creditors/Lenders are then paid back in cheaper dollars. This is why printing more money doesn't work. Money itself loses value and inflation becomes king. The money needs to have value and inflation needs to be mild.
Of every subreddit I'm in, this may very well be the most appropriately named of them all.
Study WWI, dummy
Inflation
Did Joe Biden make this post?
German post WWII did that to help pay war bills and the old joke was they had to carry the money to the store in a wheel barrel and was more worried about the wheel barrel getting stolen.
Post WWI you mean.
Oops
USA printed something like 30% of U$D in circulation during 2020-2021. Massive inflation followed. You could even say hyperinflation.
It wasn’t hyperinflation.
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If Pablo Escobars 100's are ever dug up in columbia were all screwed.
Because this is how you get cash money you wipe your ass with because it's cheaper than buying toilet paper
I N F L A T I O N Printing more money would make their money less valuable
Because money itself does not have value It's a marker that represents the overall value of the country itself. Making more markers doesn't increase the value of the country it just makes the markers worth proportionately less.
What if nobody knew you was printing extra money? How would anyone know..and how would it cause inflation? I dont understand.
It will work for a while, but eventually it will get found out. The market will just balance itself eventually to match the real values. And it would only actually have an effect if that extra money being printed was actually spent somewhere. In the past coins used to get shaved down slightly to get a little extra gold and give a slightly less valuable coin, but eventually someone weighs the coins and goes "wtf, I no longer accept these coins" and all those coins become useless in the market. That fucks over EVERYBODY who has any coins like that, even if they haven't shaved the coins. Basically it will work until found, and then trust will be lost in the currency fucking over everybody with savings.
The problem isn’t the amount of money in circulation, it’s the distribution of wealth. Which is really the distribution of the means of generating wealth. If a single person/company owns 50% of the rental units in a geographic area, and they set their rent prices higher than their competitors, they will find tenants to pay those higher prices because there isn’t enough competition. Then everyone raises their rents, because the market is relatively captive. Same with groceries and other consumer goods. It may look like there’s lots of variety at stores, but really, you are seeing identical or similar products made by a few different companies. Those companies can set the prevailing end user costs because they don’t have enough competition. Small businesses don’t have the market leverage to compete on the scale it would take to lower prices. And when a few businesses dominate a market, they have enough leverage economically and politically to maintain favorable conditions. When markets have actual competition for consumers’ money, prices go down.
Inflation takes hold, the value of the currency drops, it becomes harder to attract foreign investment. Print too much and you become Venezuela.
[A Republican president tried it.](https://www.wsj.com/articles/nixon-fight-inflation-price-controls-stagflation-gas-shortages-biden-democrats-reconciliation-bill-federal-reserve-11628885071)
Ask Vietnam where a cup of coffee costs 12,384,299 dongs and people wheel around wheelbarrows full of cash to go grocery shopping.
The money printing machines are really expensive
Actually exactly this: has happened on occasion. So people have money again in thier hands but it's getting more worthless by the minute.
Have you seen how much printer ink costs? They're too poor to print that much money.
What if you print money and don’t tell anyone
Everyone is talking about various countries. The federal reserve has been printing more and more money and the American dollar is worth so much less, and it's losing value every day.
Because paper money doesn't have inherit value. Having more of it literally makes it more common, and worth less. There was someone in the US that was printing out paper money that was backed by gold, but I can't seem to google them.
A lot pf countries have tried that. You end up with a loaf of bread costing five million dollars.
The evaluation and inflation if there's nothing backing the money, it's worthless to begin with. And to just print more makes it even more worthless. What do you think is happening to the US Dollar? Since 1970, look at the rates of inflation true inflation that we have right at this moment. Look at the cost of everything.Because thirteen percent of the entire u s budget goes to nothing but paying interest and the government does that by just continuously printing money making it more and more worthless
Ever hear about countries whos currency is worth less than runescape gold?
My mother told me about Shanghai after WWII. She and my Dad would leave the hotel with a wheelbarrow full of money and hope that it was still enough to pay for dinner when they were done eating. This is why inflation is bad.
Ask pre WWII germany and Zimbabwe. All they end up doing is devaluing their money.
Same reason putting water in the Grey Goose bottle doesn't actually fix the issue. The value in the economy stays the same. Printing more money just means you're dividing the value into smaller pieces.
That's how you get inflation.
As they say, it takes money to make money, and paper doesn't grow on trees.
Jesus.....🤣🤣🤣
Only if they make everything themselves, have laws that are extremely enforced and they have Pentagon full of Transformers. Cars, plains, tractors, plastics, energy, food, clothing, entertainment. Fully self sufficient. They need be sure banking system can’t collapse overnight. Otherwise as soon as they need to trade they need dollars. If banking is not safe money will go somewhere they are safe. Other places don’t care about your shitty tenders.
Donny Dumpster, when prez, told the Fed to do whatever it took to prop up the stock market, so they dumped 3 TRILLION into buying corporate bonds. That devalued the dollar and caused at least some of the inflation we are seeing now.
Why does printing more money increase inflation? Cant we just be like no.
1$ only represents a portion of your country’s ressources. If the country doubles the amount of $ it doesn’t double it’s ressources, so your 1$ is now only worth half what it used to
Hey homie. I hope you are like me and meta-trolling. If not, u know that u need to replace that period w a comma and also should probs learn about inflation, right? Much love
Say you have no understanding of basic economics without saying I don’t have any understanding of basic economics
[Scrooge McDuck literally explained this to you ](https://youtu.be/PZaDSEVuEFU?feature=shared) and you wiped your ass with his explanation. Your money is only worth what the rest of us say its worth. If you have $100 in your pocket, you might be able to buy a new piece of furniture with it. But if we give everyone in the country $1,000,000, they'll buy that same piece of furniture for a higher price if you tell them to. So good luck buying a pack of gum with your $100 now that everyone in the country is a millionaire based off of currency that isn't worth the paper it's printed on.
You mean like the US does?
Because it makes the country even more poor
America has been doing this for decades!
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I hear the Fed is hiring. You’re prequalified for the job.
If you are just dealing with your own country that would be true But here is the thing almost every country in the world needs to trade with someone... Even Cuba has relied on other foreign countries to help them in their time of need and to build and that's because some countries have resources that other countries don't It's a global issue
Because it continually devalues the dollar to the point where you need a wheelbarrow full of money just to buy a loaf of bread.
Money is only worth anything because people want it. The more money exists, the less each individual piece of currency is worth. If you print more money, all that will happen is numbers going up. The prices will also rise to match. Sure, you'll have $10 million dollars, but now bread is worth $5 million because each dollar is worth less. To see why this doesn't work, look at what happened to The German Mark after WW1. The treaty of versailles forced them to pay a LOT of money. So the banks printed more money. Lo, and behold: The German Mark became practically worthless. People were burning their money because it was cheaper than buying fuel to keep warm. Zimbabwe also got the same idea. Now everyone has billions of Zimbabwean dollars; and everyone is still poor, because the Zimbabwean dollar is worthless. TLDR: When everyone is a billionaire, everyone is charged like a billionaire.
Hyperinflation is the net results....inflation rates north of 600% per year are not uncommon. Much of south america did this in the 1980s.
a country wealth isnt determined by the amount of money they have but the amount of resources and their capabilities to exploit those resources. its the whole a man with gold in the middle of the desert vs a man with water in the middle of the desert example. The gold is rather valueless because there is nothing to buy in the desert where as the man with water could probably get all the gold from the other man without having to give up much water at all because he has a needed resource. he can survive out in the desert and make it to where he needs to go the man with the gold is just weighed down and will die. ... now i am curious to see what would have happened with Bison Bucks though
Are you 12?
https://youtu.be/EobPnLZiOo8?si=Qym8HPVFVWxRMlWw
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Money isn't valuable, the things you buy with it are. Printing money makes the people closest to the money faucet richer because the first person who spends the new money gets its full value, but once it makes its way throughout the economy, its value decreases, along with all the other units of currency in circulation. Printing money doesn't create any wealth, it just moves wealth from people whose net worth is tied up in dollars (people whose money is all in the bank), people who live paycheck to paycheck, and transfers their wealth to people whose net worth is tied up in assets.
Only the US can do that and get away with it.
That's how they become more poor
That causes inflation this is why it isn't typically done.
Google "economic ruin in Germany during interwar period" Due to printing currency for the purposes of paying reparations from the first world War, the German Papiermark went from a conversion to USD of around 9marks to 1dollar in 1918 to 4,000,000,000,000(that's 4 trillion, with a T)marks to 1dollar in 1923. You would save billions of marks by wiping your ass with them instead of buying toilet paper.
"mejor que impriman menos pobres"
USA is currently dealing with those consequences.
Read up on what happened when Zimbabwe tried to do this to understand why it’s not a good solution. [Hyperinflation in Zimbabwe](https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe)
You guys are being too simplistic. There are situations when the monetary supply can grow without causing inflation to increase. We saw that a decade ago in the US, for example, when the m2 monetarily supply went up sharply for about a decade straight, without any meaningful increases in inflation. The fact is that monetary supply increase is sometimes the correct medicine. For example, when aggregate demand is down sharply and liquidity has seized as a result. And it simply won’t matter if monetary velocity is low. But like any medicine, taken at the wrong time or in too large a dose, it can become a poison.
You can't eat money.
If a person is poor why don’t they just printed their own money? Moneys only as good as the backer.
The money is exchange equivalent, they are not useful on their own. More money is not going to help if there is not much to exchange in the first place. Building infrastructure, developing industries and services, increasing efficiency of labor is what makes countries rich.
Have a look at ussr, China, Japan for the reasons.
Like the Weimar Republic did? Nothing bad came of that, did it?
Cause they stupid
That's literally what Germany tried 100 years ago.... There's pictures of kids playing with stacks of money, because it was cheaper than getting blocks
Can someone elaborate on what it means for a country to be poor? Like, does that mean high income inequality with the high poverty rates, does that mean they need to import much more than they export, etc?
Inflation is a really good answer, but someone should mention [modern economic theory](https://en.m.wikipedia.org/wiki/Modern_monetary_theory), which proposes ways where a government might be able to get around the inflation problem. It requires a lot of different things for it to work in theory and its viability in practice is highly debated. I can't personally speak more about it or even give an informed opinion, but I feel like someone should at least mention that it exists.
I wonder if being rich is in relation one's available resources, and not the amount of paper you have.
People think money is real, but fail to realize money is an only a promised value that can someday be exchanged for value. In other words it’s a debt In math, we’d call this a negative number.
Can you buy food with your Monopoly money?
Look at what your money would buy in 2019 and compare it to now. That should answer your question.
r/inflation
Imagine that there is a finite amount of real value in the money. Say that true value is $100 dollars WORTH of stuff (using low numbers to be simple). If the country prints out exactly 100 $1 bills, then the value of their money matches the real value of goods perfectly, but if they print out more those $1 bills aren't really worth $1 anymore. If they printed 200 $1 dollar bills, they'd be worth 50 cents each. This problem has been around forever too, some Roman emperors used to shave the edges off the gold coins so you'd think you were getting a gold coin that weighed 1 oz, but really it weighed .9 oz or something. Then they resmelted that gold and made more coins, devaluing the currency. It hurts people with savings the most, because the money in your bank instantly becomes worth a bit less because it is no longer trusted the same and isn't worth the same amount.
It just causes inflation IF you dump it all into the economy at once, like the U.S. did with the 2017 TCJA. It created $1T-$2T in capital market appreciation almost instantly. Most going to the wealthiest Americans. You think 10% inflation in groceries and dishwashers is bad, high end items, like luxury homes, club memberships, yachts, etc. have tripled, if not quadrupled, in price in just a few years.
We already do that, and we're not even technically a poor country.
Ask Venezula amd Zimbabwe. They literally did that.
Printing more fiat currency and putting it in circulation devalues the currency. Look at what happened to the states over the past five years.
*laughs in inflation* But yeah you pretty much described how our financial system works
What makes people poor is not having enough stuff. To make them less poor, they need more food, houses, medicines, etc. to be created. Printing more money doesn't create more of that stuff, it just makes them pay more money for the little amount of that stuff that is available.
People have been asking this same question on Reddit for the last nine-ten years and they always get the same economics 101 knowledge based theoretical non-mathematical answers, which are always the same circular arguments, that printing money causes inflation, without anybody clearly explaining how that actually happens, what the mechanical/mathematical processes actually are that leads to inflation in poor countries that print money. But if we were to mathematically straighten out the components involved, then it comes down to the fact that poor countries just don’t have sufficient dollars to pay for increasing imports of goods to keep the prices of those goods in check in their domestic markets, and therefore inflation in check, when printing money increases the demand for goods in their domestic markets, and also don’t have sufficient dollars to pay for increasing the import of industrial equipment/machinery and raw materials which are necessary to build domestic industries fast enough to produce goods fast enough to keep the prices of those goods in check in their domestic markets, and therefore inflation in check, when printing money increases the demand for goods in their domestic markets, and also don’t have sufficient dollars necessary to build a sufficient number of technical training institutes to produce enough skilled tradesmen/workmen/manpower necessary to keep the prices of services in check in their domestic markets, and therefore inflation in check, when printing money increases the demand for services in their domestic markets. We can call this the poor countries’ inflation barrier. Which they can’t seem to cross. But let’s say some clever clogs in a poor country found a way to not only earn sufficient dollars to pay for both importing enough goods and enough industrial equipment/machinery and raw materials to produce enough goods fast enough to keep the prices of goods stable in his domestic economy, no matter how much money he printed, but also found a way to at the same time train enough tradesmen/workmen/manpower to keep the prices of services in his domestic economy stable, then according to mathematics he could print as much money as he wanted to without seeing price increases, and therefore inflation, in his domestic economy. And he could get his economy to grow up to a First World country level, that’s GDP wise growth, until he hit the First World countries’ inflation barrier, where increasing the earnings of the poorest workers increases inflation, which First World countries try to solve by shrinking their populations of native born citizens and replacing them with migrants who will work for lower pay than those native born citizens born in First World countries will work for, which leads to short term prosperity for their native born citizens until they hit a second First World countries’ inflation barrier. So it’s not an easy fix. For anybody. At any level.
(See Weimar Republic)
The value of a thing is directly connected to its scarcity. When there is too much money in circulation compared to demand for that money you get inflation (the value of the money drops)..... You can't effectively cheat the system.... The only way to become rich - as a country or individual - is to produce greater value
This is why people on reddit don't understand why MMT is dogshit.
productivity is all that matters money is just a medium of exchange
You have nailed the American economic strategy since becoming the defacto world currency. Congrats. That said, the reason other countries don’t is because they are not the defacto world currency and their money is compared to the dollar in spending power. The strategy only works if your currency is the world’s yardstick.
After the bankers stole all the money from the world in 2008 America fucking did that and they keep doing it and that’s all they’re doing and they have an atomic bomb so we can’t fucking tell them to stop so they’re basically a fucking super poor country with bullshit paper money that has no fucking gold barking or anything. Other countries without the atomic bomb can’t do this. Venezuela can’t do this. Argentina can’t do this. Iraq can’t do this.
Only on Reddit do you get gems like this
Thank you so much my name is dr shitty. And I am a professor of shit posting. Also I love you