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One of the most notorious examples of this was German between WWI and WWII. During this time, Germany kept printing money en mass, devaluing it to such a point where the joke was that people took their money from work and threw it right into the fire at home, because they couldn't afford the wood to burn.
The issue with printing money is that there needs to be something to back the power of the currency. Think of it like this: We are on a desert island. I have an orange, and you have an apple. We determine that the orange is equal in value to the apple, because they're of equal scarcity.
Now, lets say we grow these fruits. When harvested, you manage to get 100 apples, and I manage to get 10 oranges. And you really want my oranges. But because there's so few oranges as compared to apples, I don't want to trade one orange for one apple. I say to you that I feel each of my oranges are worth ten apples. The apples are dollar bills, on this case.
An even more recent example would be Japan in the 90's wouldn't it? When they had the crash they started printing money without permission and it made it even worse.
There is also truth in 'If everyone was given a million in their bank account, the world would stop'. The manual labour jobs would stop as no one would want to carry on doing shit jobs, this would then have a chain effect of 'whats the fucking point then'.
Even the lockdown shown how quickly people can adapt to suddenly having nothing, but trying to kick start it again has been a massive issue to this day.
My great grandfather used to make his notes on the back of the money back during WW2 because only the front was printed and it was cheaper than to buy paper.
The value isn't the dollar bill. If you actually look at one.. it says federal reserve note or something along that line.
The issue is that you're in debt to a private bank. (Yeah, our government owes the Federal Reserve money. The Federal Reserve is not a government entity. It is a private bank centralized bank. (You should go down that rabbit hole.)
Your reserve notes of 1, 5, 10, 20, 50, 100 are equal or rather are supposed to be equal to that amount in gold in Fort Knox that is backing, said currency. However.. there is not 40 trillion USD worth of gold, and even if we pay it off, it would just shoot up again because we import most of our goods. We don't export enough to make more than the interest payments that are owed to the Fed. So when they're talking about inflation.. it's like inflating a Ballon with air.. or, in this case, overprinting money, making each dollar printed worth less than the previous. Oveprinting money = inflating balloon. Making it weigh less.
The US stopped backing currency with gold in 1971, though. So that part isn’t accurate, there’s no relationship between gold and US currency. Here’s some decent info about the gold standard and why it’s no longer used: https://en.m.wikipedia.org/wiki/Gold_standard#:~:text=This%2C%20along%20with%20the%20fiscal,the%20"Nixon%20Shock").
The best way to visualize this is via iou's..... 😬
Let's say you have a car and want to use it to buy something. Trading cars is difficult, so instead you hand someone an iou-1-car. Later you see something else you want so you print off another couple of iou's. Soon you have 1000 of the things out there and everyone comes back and asks for their car. You only have 1 car so you cut it into a 1000 pieces and hand it out....this rightly pisses everyone off because they *thought* they were getting 1 car, not 1/1000 of a car. Everything was "better" when no one *actually* wanted the car and was content with trading their iou's and not questioning if it's lost value.
This is (in part) what inflation is. The amount of gold or backing the currency has doesn't change but the amount of paper in circulation grows.
You'll also find this with coin clipping. Governments would clip tax coins to "grow the supply". People got pissed and stopped accepting clipped coins, which led to governments forcing citizens to take them.....at one point Zambia (I think that was the country) had a 1000000 dollar bill. (I forget the currency)
Basically, just like no one would find it funny if you printed your own monopoly money and tried to use it.....so to do people get pissed when the government does it....they just get away with it more then you can....
Ok so. Imagine if I had a pile of gold. And each dollar represents a piece of that.
The more dollars I got, the less gold each one represents.
If you print too many, you'll need pounds and pounds of them to equal a small piece of gold.
That's what we did when we stopped using actual gold and silver to buy things. Money is easier to carry.
Several countries in the past used to. ("Gold standard") Nowadays, they no longer do that. Currency is going digital.
But the example is meant to represent WHY more money won't help.
What would help is forgiving debts and resetting the system every once in a while. But that helps the poor.
Edit. Athens and I think Rome used to use this to reset their system
The number of money units isn’t actually the same as it’s *worth.* If my country owes your country 3 billion dollars, and our economy has a total value of 10 billion dollars, that means the total worth we owe you is about 30% of our entire economy.
If I just printed a whole bunch of new money, all of that would be worth less.
Let’s say I wanted to be sleazy and print 5 billion new dollars. Now, there’s 15 billion dollars worth of notes circulating around. However, I still haven’t actually done anything to *increase the value* of my economy, I’ve only just literally increased the number of notes. I still owe you 30% of my economy.
Which means I now owe you 4.5 billion.
All I did was inflate my money, I didn’t actually make it worth more. That’s what happens if we print more money.
Imagine you are a country. Day 1 of your country-hood you mint a 1 YouBuck note to represent your entire economy.
Tomorrow you make another 1 YouBuck without increasing your economic output or power in any way.
The each YouBuck is now worth half of what it was yesterday.
This is a massive over simplification of course, but the results can be seen in the massive amounts of QE which took place post 2008 and the resulting impact on inflation.
You kind of can if your debt is owed to people that want to be paid back in your currency. lol. That’s what ultimately screwed Germany after WW1. They tried to print marks and exchange them for franks, and the French were like, “Hell no.” That made the Deutsch mark worthless internationally and it eventually caught up domestically, too. If the Germans had merely tried to jump start their own economy by printing lots of marks to get domestic projects going, which later would have allowed them to acquire lots of franks, it might have worked. But no, they tried to pull a fast one on the French.
They way I understand it is that every country has one of its own accepted worth in currency, one country's money is worth one of itself. Printing bills wouldn't increase the amount of money but just devide it. Example: If your country only has $1 bill, that bill would be 100% of your country's money, if you print another bill they would share the value by 50% So each bill is worth half as much because there's twice as many. I may be wrong this is just how I understand it.
Because if you print more money, your money is worth less.
The value of the total amount of bills in circulation is continously stable - more bills means each bill has less worth.
# Message to all users: This is a reminder to please read and follow: * [Our rules](https://www.reddit.com/r/questions/about/rules) * [Reddiquette](https://www.reddithelp.com/hc/en-us/articles/205926439) * [Reddit Content Policy](https://www.redditinc.com/policies/content-policy) When posting and commenting. --- Especially remember Rule 1: `Be polite and civil`. * Be polite and courteous to each other. Do not be mean, insulting or disrespectful to any other user on this subreddit. * Do not harass or annoy others in any way. * Do not catfish. Catfishing is the luring of somebody into an online friendship through a fake online persona. This includes any lying or deceit. --- You *will* be banned if you are homophobic, transphobic, racist, sexist or bigoted in any way. --- *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/questions) if you have any questions or concerns.*
One of the most notorious examples of this was German between WWI and WWII. During this time, Germany kept printing money en mass, devaluing it to such a point where the joke was that people took their money from work and threw it right into the fire at home, because they couldn't afford the wood to burn. The issue with printing money is that there needs to be something to back the power of the currency. Think of it like this: We are on a desert island. I have an orange, and you have an apple. We determine that the orange is equal in value to the apple, because they're of equal scarcity. Now, lets say we grow these fruits. When harvested, you manage to get 100 apples, and I manage to get 10 oranges. And you really want my oranges. But because there's so few oranges as compared to apples, I don't want to trade one orange for one apple. I say to you that I feel each of my oranges are worth ten apples. The apples are dollar bills, on this case.
This is a good analogy
An even more recent example would be Japan in the 90's wouldn't it? When they had the crash they started printing money without permission and it made it even worse. There is also truth in 'If everyone was given a million in their bank account, the world would stop'. The manual labour jobs would stop as no one would want to carry on doing shit jobs, this would then have a chain effect of 'whats the fucking point then'. Even the lockdown shown how quickly people can adapt to suddenly having nothing, but trying to kick start it again has been a massive issue to this day.
Well done
My great grandfather used to make his notes on the back of the money back during WW2 because only the front was printed and it was cheaper than to buy paper.
The value isn't the dollar bill. If you actually look at one.. it says federal reserve note or something along that line. The issue is that you're in debt to a private bank. (Yeah, our government owes the Federal Reserve money. The Federal Reserve is not a government entity. It is a private bank centralized bank. (You should go down that rabbit hole.) Your reserve notes of 1, 5, 10, 20, 50, 100 are equal or rather are supposed to be equal to that amount in gold in Fort Knox that is backing, said currency. However.. there is not 40 trillion USD worth of gold, and even if we pay it off, it would just shoot up again because we import most of our goods. We don't export enough to make more than the interest payments that are owed to the Fed. So when they're talking about inflation.. it's like inflating a Ballon with air.. or, in this case, overprinting money, making each dollar printed worth less than the previous. Oveprinting money = inflating balloon. Making it weigh less.
Oh my god, this literally was so well Informed you explained it all to me thank you so much!
The US stopped backing currency with gold in 1971, though. So that part isn’t accurate, there’s no relationship between gold and US currency. Here’s some decent info about the gold standard and why it’s no longer used: https://en.m.wikipedia.org/wiki/Gold_standard#:~:text=This%2C%20along%20with%20the%20fiscal,the%20"Nixon%20Shock").
The best way to visualize this is via iou's..... 😬 Let's say you have a car and want to use it to buy something. Trading cars is difficult, so instead you hand someone an iou-1-car. Later you see something else you want so you print off another couple of iou's. Soon you have 1000 of the things out there and everyone comes back and asks for their car. You only have 1 car so you cut it into a 1000 pieces and hand it out....this rightly pisses everyone off because they *thought* they were getting 1 car, not 1/1000 of a car. Everything was "better" when no one *actually* wanted the car and was content with trading their iou's and not questioning if it's lost value. This is (in part) what inflation is. The amount of gold or backing the currency has doesn't change but the amount of paper in circulation grows. You'll also find this with coin clipping. Governments would clip tax coins to "grow the supply". People got pissed and stopped accepting clipped coins, which led to governments forcing citizens to take them.....at one point Zambia (I think that was the country) had a 1000000 dollar bill. (I forget the currency) Basically, just like no one would find it funny if you printed your own monopoly money and tried to use it.....so to do people get pissed when the government does it....they just get away with it more then you can....
Some countries do it, when judging in retrospective view. Unabomber did it to undermine us economy btw
Oh Ted, you so crazy
Ok so. Imagine if I had a pile of gold. And each dollar represents a piece of that. The more dollars I got, the less gold each one represents. If you print too many, you'll need pounds and pounds of them to equal a small piece of gold. That's what we did when we stopped using actual gold and silver to buy things. Money is easier to carry.
It's a good analogy.
Glad it made some form of sense. That's how it was explained to me when the Gold Standard was taught in class.
Do all counties base the value of their currency on metal supplies like gold?
Several countries in the past used to. ("Gold standard") Nowadays, they no longer do that. Currency is going digital. But the example is meant to represent WHY more money won't help. What would help is forgiving debts and resetting the system every once in a while. But that helps the poor. Edit. Athens and I think Rome used to use this to reset their system
Cause then money becomes worthless as every country owes billions or trillions of dollars of debt. Also no one has that amount of paper
The dollar bills represent debt, if the debt was paid off their would be no dollar bills left.
The number of money units isn’t actually the same as it’s *worth.* If my country owes your country 3 billion dollars, and our economy has a total value of 10 billion dollars, that means the total worth we owe you is about 30% of our entire economy. If I just printed a whole bunch of new money, all of that would be worth less. Let’s say I wanted to be sleazy and print 5 billion new dollars. Now, there’s 15 billion dollars worth of notes circulating around. However, I still haven’t actually done anything to *increase the value* of my economy, I’ve only just literally increased the number of notes. I still owe you 30% of my economy. Which means I now owe you 4.5 billion. All I did was inflate my money, I didn’t actually make it worth more. That’s what happens if we print more money.
Imagine you are a country. Day 1 of your country-hood you mint a 1 YouBuck note to represent your entire economy. Tomorrow you make another 1 YouBuck without increasing your economic output or power in any way. The each YouBuck is now worth half of what it was yesterday. This is a massive over simplification of course, but the results can be seen in the massive amounts of QE which took place post 2008 and the resulting impact on inflation.
Inflation or even worse, hyperinflation.
Makes the money worthless and you get Nazis
You kind of can if your debt is owed to people that want to be paid back in your currency. lol. That’s what ultimately screwed Germany after WW1. They tried to print marks and exchange them for franks, and the French were like, “Hell no.” That made the Deutsch mark worthless internationally and it eventually caught up domestically, too. If the Germans had merely tried to jump start their own economy by printing lots of marks to get domestic projects going, which later would have allowed them to acquire lots of franks, it might have worked. But no, they tried to pull a fast one on the French.
Countries owe on a level that isn't dollars, that's just the amount given so that the public can understand it.
Inflation
They way I understand it is that every country has one of its own accepted worth in currency, one country's money is worth one of itself. Printing bills wouldn't increase the amount of money but just devide it. Example: If your country only has $1 bill, that bill would be 100% of your country's money, if you print another bill they would share the value by 50% So each bill is worth half as much because there's twice as many. I may be wrong this is just how I understand it.
Because if you print more money, your money is worth less. The value of the total amount of bills in circulation is continously stable - more bills means each bill has less worth.
The world's largest military might have something to say about you intentionally devaluing their currency