Are you a writer? Register on our platform and share your skills in the world of internet. Remember, the text you submit to our platform must be completely unique. Don't post Tobacco, casino and adult.

   

Why can’t you print dollars at will

HomeAsk The Unknown › Posted by , 18/02/21

Advertisements

Dollars! Without which life is useless. People all over the world are running after the dollar. Even after a lot that falls short. Again, many sadness does not end for this dollar.

The question is why the dollar is printed so low? There is no more trouble to print more!

A Spanish TV series called “La Casa de Papel” caused quite a stir. It shows a group of robbers breaking into a Federal Reserve Bank and taking some people hostage. However, the method of looting them is a little different. They are not looting bank dollars, but making billions of dollars using bank dollar printing machines.

After seeing this, many people have come to the question that if the government like them prints billions of dollars and hands them over to us, then all the financial problems will be solved! Or, if the government prints sacks of sacks of dollars and builds big bridges, roads and spacecraft, then where is the problem?

Lots of problems! If there was such an easy solution to such a big problem, there would be no more worries. Let’s find out where the problem is.

Specifically, it is the responsibility of the central bank to print dollars. So, on what basis does he make dollars? Can he print as many dollars as he wants?

There are no rules for producing dollars. The government of any country has the freedom to print as many dollars as it wants. However, no country prints as many dollars as it wants, the dollar is printed in balance with the economic needs of the country. The amount of dollars produced is related to the income of the people of the country, economic needs, resources of the country etc. The problem starts when more is produced, the country’s economy starts to lose balance.

See also  whisper in ear

Suppose there are ten mangoes in a country. And that country prints 20 dollar a year. Excluding the cost of transportation, retail price, wholesale price, etc., the price of each mango is 2 dollar. Then the total wealth of the country and the total currency became balanced. The following year, the country printed a total of 40 dollar, but the total assets remained at ten.Since there are no new resources in the country, the allocation for the purchase of those 10 mangoes is  40 dollar , which means that the price of each mango has doubled. In this way, if more dollars are produced than the total assets of the country, the price of goods increases, the price of dollars or purchasing power decreases. This is called inflation.

What is the benefit of printing more dollars when the price of goods increases? Therefore, the central bank of a country has to determine the demand through systematic research and print dollars accordingly. Usually 2-3 percent of a country’s GDP is printed in dollars, but in developing countries this rate is a little higher.

That’s why we can’t make big bucks overnight by making as many dollars as we want. Then that extra dollar will enter the mainstream economy through the hands of workers, engineers, dealers, suppliers and many more and will make the country’s economy worse.

Inflation not only causes excess money to be squandered, but also severely hurts the balance of the country’s economy. Do you know how it is?

The cost of savings will go down. Today I did not buy chips for 10 dollars and put it in the bank. Now, if I see two days later, the price of a chip is 20 dollar, then the savings thing has died on its own feet!

See also  Benefits of Blood Donation

Many of us have bought bonds or seen someone buy bonds. The government actually lends us money through these bonds. Today, the government is using the money to sell fifty-dollar bonds and return the fifty dollars a year later. Now, if you buy a fifty dollar bond from the government, after recovering that dollar a year later, if you see that you can buy less rice for fifty dollars than before because of inflation, you will naturally lose interest in buying a bond.

If the government fails to sell the bonds again, it will be deprived of the necessary funds. Businesses will lose interest in investing due to the uncertainty of the purchasing power of the dollar. There will be instability in the business sector.

In a country where there is inflation, the value of the country’s currency will be lower than that of other countries. Suppose the inflation rate in Germany is 20% per day, and in the United States it is 0%. In other words, the price of a product of 100 dollar will be 120 dollar in Germany and 100 dollar in America. In that case, the value of one US dollar will be equal to 1.20 mark of Germany (German currency).

We know about the abnormal inflation in Zimbabwe. There is a saying that you have to go to the store with a sack of money to buy a packet of bread. Not to be outdone, there are billions and trillions of Zimbabwean dollars there.

See also  How To Start Blogging?

This abnormality started in 2008. Zimbabwe’s economy has been in a state of disarray since the 1960s. In the 21st century, it has reached its peak. The Mugabe government decided to print large amounts of dollars to handle the economy. This decision in turn led to the destruction of Zimbabwe’s economy. As a large number of dollars are printed, the prices of goods continue to rise by leaps and bounds. Zimbabwe’s current inflation rate is 96% per day, which means100 dollar today, 198 dollar tomorrow!

Think! However, the highest rate of inflation is not. In this unpleasant record of Hungary, in 1946 the inflation rate in that country rose to 195% daily.

The country in which you repay the debt with the extra printed dollars, the country in which you spend it, will return to your own country. Because the currency of our country has to be accepted by the people of my country till the end, in other countries you cannot buy with this currency! So the extra dollar is entering our country’s economy.Another important thing is that I can’t use these dollars to pay off foreign debts directly, because the loan agreement has an obligation to repay them in a certain currency.

Making more dollars to develop a country’s economy is not the answer, the solution is to increase production. This will increase people’s purchasing power. If you can do the opposite development, the development will be the opposite!

Visit our UpdateLike.com website regularly to know new and unknown tips and tricks like this every day.

Advertisements
Report

About Author (54)

Subscriber

I would like to highlight my experience by presenting research and results to the people.

Advertisement

Leave a Reply

You must be Logged in to post comment.

Related Posts

Advertisements

Categories

Advertisements

Extra service

Advertisements
↓↓ Select Your Language ↓↓
(Update Like) is available in :
English
Español
বাংলা