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>>If Greece had its own currency, they would print more of it and use that money to pay government salaries and pensions. Doesn't this lead to hyper inflation
by kamaal 11y ago
>>If Greece had its own currency, they would print more of it and use that money to pay government salaries and pensions.
Doesn't this lead to hyper inflation situations. Basically money is what you trade for effort. When you freely "print money" you are simply supplying a lot of cash for the same effort. In return you simply pay a higher price for the same things.
There fore only way to increase the supply of money is to increase trade able effort in some way.
How will simply printing money solve anything? And how are few countries exempt from this rule?
- netcan 11y agoIt causes inflation. A lot of it causes hyperinflation. With lots of extra caveats and clauses, naturally. You can think of it as a tax on everyone who holds the currency (or other assets directly tied to it, like bonds). If the government prints money, they have it and they can spend it on (for example) salaries. That solves the problem of not being able to pay salaries. No country is exempt, but if a lot of foreigners hold reserves in your currency, they have to share in the cost of inflating it. Al lot or a little is relative to the total stock of money in circulation. Lots of countries hold US Dollars, so the US can print with milder domestic consequences.