Money of the world

Mint money

Forms of money

New American money

Old money of Britain

Price of money

Children's money

Another's money

Simple money

Money in the sleep

Dirty money

Money power

Colour of money

Mint money

Personal money

Dear money

Automatic machines on money

Many ask often, why the government cannot print more money to solve a problem of a national debt. The reason that monetary stock increase, does not improve economic production in any case. It simply calls inflation.

We Will assume that the economy manufactures the goods on 10 million rubles. For example, it is 1 million books on 10 rubles each. If the government doubles a monetary stock we would have till now 1 million books, but on hands at people is more narrow than more money. Demand for books will grow also sellers will be compelled to raise the price for books, that is 1 million books will be sold for 20 rubles each. The economy costs now 20 million rubles, instead of 10 million as earlier. But, quantity of the goods exactly the same. It is possible to tell that there was an illusion of increase in gross national product. The truth of money at us became more but if all has risen in price in the same measure, what sense in it?

Minting money
If the government prints more money, than it is necessary is will create inflation. The price of the goods will grow, together with increase of the sizes of allowances and wages. The State expenditure will grow because of inflation. Borrowers will require higher interest rates to purchase bonds. Minting money will not solve a problem of a paucity of money but only will create additional problems with inflation.

However minting money not always is at the bottom of inflation. During recession with the deflation periods, it is possible to increase a monetary stock, without calling inflation. It because the offer of money depends not only on a monetary base, but also speed of their circulation. For example, if there is a sharp falling of bargains (velocity of circulation), there can be a necessity to mint money to avoid a deflation.

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