4 ms·
What if the gov just prints money and resolves these IOUs on behalf of connected people, does it have much of an effect on the economy and if so why. Is this w
by darepublic 7y ago
What if the gov just prints money and resolves these IOUs on behalf of connected people, does it have much of an effect on the economy and if so why. Is this what we are already doing ourselves in the west?
- RockIslandLine 7y agoThat's not a precedent to set lightly. Government money creation should be used for actually productive purposes. While avoiding costs represents some kind of return, it's not clear that's the best plan.
- la_barba 7y agoThen you would have excess money supply, and if demand for the currency stays the same, it will devalue the currency, which causes inflation. That might be OK, as long as its below your economic growth rate. With the US, the treasury uses the fact that the US dollar is one of the reserve currencies (the euro is catching up), and the US government demands payment for their security services to Japan/Korea/etc in USD, etc,etc helping maintain the demand for the USD.
- TMWNN 7y ago>With the US, the treasury uses the fact that the US dollar is one of the reserve currencies (the euro is catching up) No, it is not. https://en.wikipedia.org/wiki/Reserve_currency#/media/File:Global_Reserve_Currencies.png https://en.wikipedia.org/wiki/Reserve_currency#/media/File:G...
- DeonPenny 7y agoYeh the euro isn't catching up anytime soon. They don't have a strong central government or a single equity market. Until they fix that they are boned
- DeonPenny 7y agoWell I all the economy is represented by a dollar and I have the dollar I own everything. If the gov prints another dollar I've now become 50% poorer. The government essentially has taken my money. Same thing happens here. If the government prints 200 million anyone with RMB in saving will get substantially poorer and good all get more expensive.