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That's not completely correct. Governments don't print money, central banks do. Governments still have have to sell bonds to actually have money to spend. The a
by w0utert 13y ago
That's not completely correct. Governments don't print money, central banks do. Governments still have have to sell bonds to actually have money to spend. The amount of money in circulation affects the interest on these bonds, but it's not as simple as saying governments can just print money without consequences (maybe it should be, but that's a different discussion).
- jobigoud 13y ago> Governments don't print money, central banks do. I think most money is created by private banks, not central banks.
- w0utert 13y agoNo, credit is created by private banks, but the money supply is controlled by central banks, for example like the FED does right now by scooping up assets (quantitative easing, ie: increasing the money supply). This is popularly called 'printing money' but obviously that just an allegory: nothing is actually 'printed', and the amount of currency (notes and coins) in circulation is completely unrelated to the money supply.