Can someone please explain to me...?

Question

why money can't just be made for the people in poor countries, why money can't be made for everyone?

They make money in factories, so just make loads of it and no one will be too poor. Someone explain to me why this can't happen.

Answer 1

There needs to be value or something backing that money. Meaning if you just print a whole bunch of money, you're sort of making more bills for the same value-which causes inflation. The money's value will drop. So for example, if you had a dollar, and you just printed more dollars... the dollar would be worth something similar to a few cents because the value behind it has been spread out among more dollars.

Answer 2

Chelsea babe, you have got to take some economics classes. I had to wait until college until someone gave me an intelligent answer to this.

You are right, money is printed sooooooooooo why don't we just print enough of it and give it to everybody?

Well, there is a simple little law which forms the basis of all the theories of economics called the law of supply and demand. You are actually a lot more familiar with it than you realize.

The law says, that if I have more of something, its value goes down. If I have less of something, its value goes up.

If there is high demand but low supply, then the price will be higher because some people will be wiling to pay more for it than some other people. If there is low demand and high supply, then it will be dirt cheap.

The same is true with money. If we simply print more money, the money won't be worth anything because everybody will have it. A dollar will not be worth a dollar anymore. A dollar will be worth like 50 cents or something. Right now, we use a dollar to buy a can of coke but if we printed all the money everyone wants and just gave it away, then kids will use bundles of money to play with because it won't good enough for anything else.

This is exactly what happened with Germany's currency in the world wars.

The actual number of bills in circulation in the US and around the world is actually very seriously controlled. A lot of time, calculations, statistics, and tough decisions are put into it. And that is one of the reasons a dollar is worth what it is worth.

Answer 3

Money is an abstract concept. What it allows us to do is to find a market for SOME of our goods and services in a quick fashion. So it is really a substitute for what we and others agree is the market value of those goods and services.

So let's say you raise chickens, but no veggies, but you like veggies and Manolo Blahnik shoes.
Rather than hunting for a veggie farmer who wants a whole chicken and not half of one, at the price that you think is fair (i.e. for the amount of veggies you want).... and rather than trying to give Manolo Blahnik a year's worth of eggs for a pair of shoes.... We all agree to use a common currency in our local market in exchange for our goods or services. It used to sea shells and gold bouillon, now it's Dollars, Pesos, Yen, Deutsche Marks, etc.

So why can't money be made for those poor people? Because even if it was printed (which 3rd world governments do all the time), it would have no more value than the existing money already in circulation (so their exchange rate would worsen). Why? Because the world market does not put a high value on the goods and products of those people, i.e. they are poor.

Now this may just be a marketing problem, a quality problem or a supply and demand problem, but it's irrelevant, the value of their output is still highly discounted compared to that of other offerings.

Answer 4

Because at some point down the chain, that money has to be exchangable with something of value.

Lets take the desert nation of Desertia. They print out millions of their money, called "Sand Dollars". The richest guy in Desertia has $1 million sand dollars, but can't use them in Desertia, because there is nothing to buy but sand. So he goes to the US, to go shopping. He finds that he can't buy anything there, either, because nobody wants to take his sand dollars.

The only merchant that will take his money is a bricklayer, who sells him a pile of bricks for $1 Million sand dollars. Wow, that stinks. This guy's life savings for a pile of bricks.

But why does the brick layer want the $1 Million sand dollars? Simple, he can use it, to go to Desertia, to buy sand for cement for his bricks.

So simply printing out money isn't the answer - you have to build or have something of value. The reality is that poor countries usually do have natural resources or other thing worth buying, it's just that they are sucked up in government corruption, or disturbed by war.

Answer 5

Say there is $50000 billion in the world. If we print another $6 million then everyone will have $1 more. Then no-one will be more wealthy that they were before and then that dollar would be worth less than it would if there was only one dollar printed.

e.g. a ferrari. If only one Ferrari Spider 1992 was made, it would be worth millions. But, because a few hundred were made, it is worth around $350, 000.

Ok?

Answer 6

The more of something there is the less it is worth.
Gold is worth a lot of money per ounce for the sake of this lets say £100 per ounce. But if gold were found all over the place like sand it would be worthless...just like sand.
the same is true of money. If you print more it becomes worth less.

Answer 7

Unfortunately the paper money really doesn't mean much. You have to have gold to back it. That is what money really is. The paper dollars are only a matter of convenience for us to be able to carry around. That way we don't have to carry around large chunks of silver and gold. It's value. We can only print as much as we truly have. Unless I"m mistaken I think that is still how we run things.

Answer 8

because of inflation. if you make more money it has less value. look at what happened in Germany during hyperinflation. they had less money in their money so they just printed larger notes. these large notes still had very small money because outside Germany they could not buy anything. the same thing would happen today in third world countries, overseas trade would become impossible and they would just have lots of useless paper

Answer 9

Brilliant idea. But why restrict it to poor countries? Why not give it to every one so can all be millionaires?.

But then no one who will ever bake you a loaf of bread, if he can have money doing nothing.

Answer 10

Chronic inflation, if you print more money prices just go up and up. Don't ask me why it happens but it does, and you ending up having a loaf of bread costing thousands of pounds.