Why cant a poor country print its own currency and be rich?

Answer 1

Currency is no longer backed by the gold standard. That was abandoned in the early 1900s during the Bretton Woods negotiations.

To answer your question: The poor country would have to use some sort of means to tie the currency to a value basis in a stronger currency. For example, some countries deliberately mark the value of their currency to the US dollar (e.g. Hong Kong) or the UK pound.

If the poor country has no manufacturing and no export commodoties, their currency value may be limited by the fact that other countries will not have the need to obtain the poor country's local currency for purchases of that country's goods/services/commodities. Richer countries tend to have stronger currencies because of their resources (commodities, goods, services) that can be acquired by that currency.

Poor countries that overprint money also tend to suffer from inflation (meaning that it takes a large denomination of their currency to buy something).

Answer 2

The problem with a country printing its own currency to make itself rich is that the value of its currency would not be worth much on the international exchange market.
The exchange rate would become so low that they would not get any real value out of the extra currency they printed.

Answer 3

the answers stating that there is a need to have the currency backed up by gold or somthin are totally FALSE. history has shown repeatedly that countries that have distanced themselves from bankers' control .. and printed their own money have prospered .. the trick is to have control of the amount of money by a force that is FOR the people ... an example was in pre-revolution america the colonists started their own fiat currency called colonial scrip and it was a time of great prosperity in the colonies ... the trouble came when the bank of england saw they were not in control anymore and that the colonies had found out the secret to money, and then subsequently outlawed the colonists colonial scrip and forced them to pay taxes in gold .... this was the root cause of the revolutionary war ..... YES ...the countries throwing off control of international and central bankers from controlling their money supply is the key to prosperity for all.

Answer 4

Zimbabwe is doing that now -- printing its currency with abandon. Unless a currency is convertible (at least on some terms) you can't import anything from abroad. "Wealth" consists in being able to buy stuff.

That's why countries have foreign currency currency reserves. And why they monitor their "money supply". Too much money in circulation = inflation.

Answer 5

The reason is that currency is worthless unless it is backed by something. The paper bills and coins you use everyday are themselves worthless, but are backed up by a gold standard. If you print extra money and don't have anything to back it up, this will lead to hyperinflation and you won't be able to do anything with your money.

Answer 6

They have to have some sort of collateral to back up the currency and they don't have it. The USA has gold stashed away to cover our currency printing.

Answer 7

the situation with a rustic printing its very own foreign places money to make itself wealthy is that the cost of its foreign places money would not be nicely worth lots on the international substitute industry. The substitute fee might become so low that they'd not get any genuine cost out of the better foreign places money they revealed.

Answer 8

A country may only print money to the equavalant to the amount of gold (gold bars you see in the movies.. i think its called bullion)it has in its reserve bank.

Answer 9

where are you from ?it is a funny question if you are in desert and you have 1000 $ and you are thiresty dont you change 1000$ with
a bottle of water in poor country there is no water

Answer 10

because the poor country's money must be backed or supported by real wealth, not just by a stack of clean printable paper.