Who decides how much money each country should print?

Who decides how much money each country should print?

Postby orik » Wed Jan 12, 2011 8:46 am

ok i was thinking about it so i decided to ask.....i mean how and who decides how much money should be printed by every country.....cuz i mean cant countries simply print out enough money to pay their debts...i know its a stupid question but im just curious
orik
 
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Who decides how much money each country should print?

Postby arnolde » Wed Jan 12, 2011 8:47 am

ok i was thinking about it so i decided to ask.....i mean how and who decides how much money should be printed by every country.....cuz i mean cant countries simply print out enough money to pay their debts...i know its a stupid question but im just curious
Each country decides. In America it's the treasury (mint). Printing too much money creates inflation, meaning there's too more of it, so each dollar (euro, pound, etc.) is worth less. So, in short, we can tomorrow, create enough currency to pay all of our dept, but the money will lose a ton of value and the price of everything will skyrocket to match. Or, we can slowly pay the dept off, and hope our services and exports go up in value to offset the loss of value of the currency.
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Who decides how much money each country should print?

Postby mojag » Wed Jan 12, 2011 8:50 am

Our money used to be base off the gold standard. Nixon removed that. All the other presidents did not stray from the gold standard. Except Obama. If you look at the value of a dollar on the currency exchange rate you would see that our dollar is dropping. If printing continues our American dollar could be the same as a Mexico peso!
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Who decides how much money each country should print?

Postby pio » Wed Jan 12, 2011 9:08 am

Each country has a complex web of red tape, so on 'one' can decide this.


In theory America does not print 'new' money. Technically all they print is replacement money.

When money is printed and sent to a bank...that bank has to first send in old, warn out money to be destroyed, equal to the amount that they are getting in new money. That way, the amount of cash in the system does not change.

There is no reason a country could not just print money and pay off anything....except all the rules and such that the country must follow. The truth is the BANKS are in control of the money.

The whole 'valueless money' thing is just a economists dream. The dream is, say the government printed and gave each person a million dollars. BAM! everything everywhere would automatically go up in price. a loaf of bread would jump from 99 cents to $100,000! A new car would go from $20,000 to 20 million and so on. It's so crazy, it would never happen.
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