My admittedly poor understanding is, because printing money increases inflation. You can't just print more money because people will stop believing in the value

My admittedly poor understanding is, because printing money increases inflation. You can't just print more money because people will stop believing in the value of the currency, which destroys any holdings of owners of large capital. The United States is a bit of a special case; the dollar is the world's reserve currency. For starters, as a large business you have a big need to stash your money into some kind of ultra-safe vehicle with lots of liquidity. Lots of companies sink their payroll into Treasuries because a) they know they can sell them when the time comes and b) they're basically guaranteed to never lose value. Secondly, It's the currency of international trade; if I live in Brazil and want to sell my coffee to Russians, we will exchange dollars. As a result, there is a constant demand for lots of dollars. Finally, US Treasuries are currently set at negative real interest rates. If I were to buy a Treasury today, after inflation, I am paying the US Government for the privilege of lending it money. See for yourself: http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield http://www.treasury.gov/resource-center/data-chart-center/in... (As for today, a 5 yr bond is going for -1%). This is to say, no one is getting paid an enormous amount of risk-free interest. You only invest in Treasuries if you have absolutely nowhere else to put your money. No one likes having their money in Treasuries, because while the nominal value is basically guarantee, you lose money by holding them. Edit: as a final aside, some commentators have gone as far to say that the current crisis in Europe stems from German hatred of inflation; they could easily solve the problem by having the ECB guarantee EU sovereign bonds, but that would probably cause the inflation rate to rise above 2%.