"Bruce in Bangkok" wrote in message
...
On Fri, 26 Oct 2007 22:54:44 -0700, "Hawke"
wrote:


"Adam Corolla" wrote in message
news

"Hawke" wrote in message
...

I sure wish they would stop printing so much money. It's
getting to be worthless.

Are you joking, or do you really believe that the amount of money
that's
printed affects its value?


Nope, I wasn't joking. The fact is the more money that a government
prints
the less value it has. It takes more money to buy commodities because
there
are more and more dollars chasing the same amount of goods. A good
example
of this was in post WWI Germany where the inflation was so high that it
was
reported that it took a wheelbarrow worth of money to buy a loaf of
bread.
The German government tried to get out of its economic problems by
printing
more and more money but all that did was create hyperinflation. Inflation
takes the value out of a dollar or whatever currency you are talking
about.
The more scarce a dollar is the more it's worth and vice versa. Money is
just paper with ink on it. Money has no intrinsic value by itself. Much
psychology is involved. People have to believe that money is valuable for
it
to be valuable. Once people see money as not being valuable they want
more
and more of it to purchase the same thing they did a week ago and on and
on.
Government creates inflation by printing too much money. Inflation makes
the
dollar able to buy less and less so you need more and more dollars. It's
simple economics really. Right now we'd have tremendous inflation but
since
we're buying everything overseas prices are staying low. For now.

Hawke

You are being over simplistic. Governments print more money so
inflation results. Takes a wheelbarrow full to buy a loaf of bread.

It is a bit more complicated then that and I'm not here to educate but
the first thing you need to think about is how does the money get from
the Government Bank into all those wheelbarrows?

You can equally well blame labor unions for inflation as the union
goes on strike; gains higher wages for the employees; who now have
more money to spend. As a result of the costs of the higher paid
employees employers have to raise the price of goods made and as well
need to borrow more from the Bank to finance operations. As more goods
are being made the demand, and therefore the cost, of raw materials
goes up.

In short inflation and or depressions are caused by a multitude of
actions and reactions and are far too complex to explain by a
simplistic statement that the Government prints too much money.

Not according to Milton Freedman. But also understand that I was truncating
the process so it could be briefly stated and the gist of it understood by
someone who isn't well versed in the subject.

Hawke