How does the bank decide how much currency to print and how do we fund it?

Question

I already asked about how our currency is funded ( I thought it was gold) Thanks for the answers but can anyone explain to me in simple terms how we stop ourselves going bankrupt as a country? If the price of everything goes up , including our salaries how do we raise the money for it all?

Answer 1

Cash is Finite, Wealth is Not

The population of the United States on April 1, 2000 was 281,421,906. The total amount of U.S. currency in circulation that year was $500 billion, but two thirds of that was/is held overseas, so that left $167 billion available in the United States. A little division tells us that there's 593 dollars and 42 cents for every man, woman, and child in the country.

I have heard people argue that if some people are poor, it can only be that they were cheated out of their money by some nasty rich person. Well, if cash and wealth were one and the same, we'd be a pretty poor nation, wouldn't we? Cash is just another commodity, like cows, or batteries. We use it as a medium of exchange only because it was designed for that purpose, and is therefore extremely convenient in that role. Cash is the grease that keeps the wheels of the economy turning. Not enough, and things slow down. Too much, and the economy runs "too fast". Here's an even stronger example:

The Federal Government collected $1,825 billion in taxes for fiscal year 2000. That means Uncle Sam collected every single dollar in the country eleven times over, in just one year! How is it then, that we're not all broke?

The answer of course, is that we create NEW wealth, and we do it all the time! The government even keeps track of this for us: You hear it on the news from time to time. It's the Gross Domestic Product. (GDP) The GDP is defined as "The total market value of all final goods and services produced in a country in a given year." For the U.S. in 2000 The GDP was 42,756 billion. Now we're talking real money! That's $152,157 each. To be honest, that figure does include services, which don't result in tangible assets. I think the point is clear though: an awful lot of people are out there creating new wealth. If someone doesn't have as much as they'd like, they should be out there creating more themselves, not whining that they deserve a share of someone else's.

Answer 2

You don't fund it. That's where the national debt is coming from. It is a magic trick of filling one hole with another. Money is what everybody believes it is. Nothing more.

That the money is backed by gold is a nonsense rule. About 2% is backed by that. The rest is presumed to be backed by all that the country is including growth-potential. In other words; lots of air.

Our economy is based on growth. This can only be done if money loses value. Else most would not need growth but the country does. It keeps us going, wanting, hunting.

Sad but true. Your dream will never be with this way of making the world work.

Answer 3

Banks don't print money. The Federal Reserve Board is in charge of money supply and the Treasury Department prints the money. The Federal Reserve Board makes decisions on the Prime Interest Rate which others follow.

Answer 4

Our currency has not been backed by gold for a long time. It used to be. Now our money is worth something because the United states says it is.

Answer 5

The Federal Reserve System is in charge of the U.S. money supply. (The "FED' for short). The FED orders currency to be printed; the Treasury Dept.'s, Bureau of Printing and Engraving, prints it as ordered by the FED. You are right, our money is not funded by gold. It is not "funded" at all. We have what is called "Full Faith and Credit" currrency. Dollars are backed by the "Full Faith and Credit" of the U.S. Amazing, huh?

Answer 6

http://www.thetruthseeker.co.uk/article.asp?ID=96

Please read the above article.
Entitled 'The Origins of the Banking System'

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/14/cnusa14.xml

This link is an article from the Telegraph
titled 'US could be going bankrupt'

This should give you an idea why.
If you read the first article you will get an understanding of the true nature of the banking system.

Hopefully they will be of some help

Peace n Luv

Answer 7

And who sold off our gold reserves at a very poor price?

Answer 8

The banks don't make it...the US Mint prints it...and nothing but faith is backing it up

Answer 9

the govt can't fund it, they can't balance their budget, if this was you or I we would be in jail for writing hot checks.