Worth looking up the story of John Law. He noticed interest rates at banks dropped when gold and silver ships from the Americas appeared on the horizon of Euro

Worth looking up the story of John Law. He noticed interest rates at banks dropped when gold and silver ships from the Americas appeared on the horizon of European ports. Cause it meant money supply was going to increase in the market. Leading to more trade > manufacturing > jobs. So he asked the question why wait for the ships? Lets just print IOUs on paper and generate all this economic activity. Convinced the king and everyone has been doing it since. Only problem is if IOUs are printed faster than goods arrive in the market we get Inflation or even Hyperinflation. People spend more and more, to buy less and less causing all kinds of chaos. If printed too slow there are other problems. Kings over printed all the time to pay off debts inccured in maintaining armies, building palaces or whatever. Which leads to people ditching the currency for gold or something else, panic, bank run, bank failure, king toppled etc On the flip side, industrial revolution, Tech disruption caused goods to arrive faster in the market faster than money was printed causing them to be sold cheaper than produced. So we end up with Central Banks given the job of tracking inflation and increasing or decreasing the money supply to keep things stable.