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What makes you think other countries with rapid inflation don't manage currency supply? If the monetary base suddenly doubles, the money will trickle down soon
by nine_zeros 6y ago
What makes you think other countries with rapid inflation don't manage currency supply?
If the monetary base suddenly doubles, the money will trickle down soon enough.
In US dollars case, it will trickle down to people and almost all other countries. Those countries will have more dollars in reserve, thus raising value of their currency or giving them low interest rates or ability to print even more.
This is extremely evident in the case of emerging markets like China. They will now get even more printed dollars in reserve and the only way to absorb it all is to print more yuan and allow more money to flow through China's economy, thus increasing wealth of the hundreds of millions still in poverty.
- dragonwriter 6y ago> What makes you think other countries with rapid inflation don't manage currency supply? They do. But on the (fairly rare) occasion of hyperinflation, they aren't managing it focussing on price levels, but some other objective, usually one or both of juicing short-term economic performance without regard to price levels or monetizing debt.