PDA

View Full Version : Are there any drawbacks to a print money, world economy?


Greg10
Jan 16, 2013, 04:25 PM
I was wondering if there were any draw backs to a print money, world economy.
If this was agreed upon by a large group of countries and done secretly.
How could this not work?

paraclete
Jan 17, 2013, 09:12 PM
basic economic thoery, the Cambridge Theory of the Velocity of Money suggests that as the supply of money rises the people will attempt to obtain more of it, causing its value to fall, this is called inflation or demand side economics. When a government has more money it spends it creating economic activity. The idea that governments could secretly print money and flood currency markets is ridiculous since any change in available currency would immediately result in currency devaluation