Why don't poor countries just print enough money to get them out of poverty?

Answer 1

Unfortunately it seems that some try, that is why they are so poor. Printing more money only reduces the value of the money.
If gold became as widespread as paper it would lose its value, as diamonds would if they were as common as pebbles.
The same is true with money, there needs to be a limited amount to make the money valuable.
Poor countries have got to make the value, to get out of poverty, not the tokens for the value.
Rich countries have worsened the condition of the poor countries by buying at low prices from them, and selling at high prices elsewhere.
Fairtrade is a system trying to redress the problems of the poor, but we as customers prefer to buy cheap, which encourages the companies to carry on exploiting the poor countries.

Answer 2

Beacause exchange rates are different every minute of every day, as a result of people and banks trading what they have too much of for what they need instead.

So as soon as President Poorandindebtenge prints an extra billion poorandindebtcountrydollars and takes it to the international bank to pay off part of the debt with. The bank then takes this money to the foreign exchange (forex) market, thinking what do I need all these poorandindebtcountrydollars for when I could change these for euros or rich country dollars to pay my bills with and to pay off my shareholders with.
The bank cannot find anyone willing to sell it euros at current exchange rates in exchange for a billion poorandindebtcountrydollars, so it ends up accepting that it will have to sell chunks of it at well below market prices. Every time it does so, the poorandindebtcountrydollars currency has lost value, and by the time the bank has sold off the billion poorandindebtcountrydollars it cannot use, the value of the poorandindebtcountrydollars currency has slipped, possibly so far that it is now worth less than the paper it is printed on.

So in summary, printing more money causes inflation and a loss in the value of the currency, thus making the NEXT installment much harder to pay for...

and causing all sorts of problems for all the people who are trying to buy things from abroad (because an item that cost five euros to import before the loss of value of the currency may still cost five euros afterwards but at the new exchange rate it could translate into a tenfold price increase - not very nice at all).

Answer 3

Only banks and confidence tricksters make this one work. But always there is a huge cost for the majority of people who are scammed, whether "legitimately" through the banks or by the con men.

Money is itself worthless.

Countries that attempt to sort a quick political fix by printing more to please their people merely devalue the symbol or exchange value of the currency.

This does not work.

Working toward productivity, trading goods and labour, is the conventional way of raising living stfandards.

But this usually requires education, industrialisation, and self-sufficiency. Japan is an exception. It is not self sufficient in food production, nor does it have vast natural resources. But it has excellent labour. It's people are a good resource and it is now highly industrialised with good exportable management and
investment skills. It can trade these assets for quality food.

Other countries are not as fortunate. Some suffer because of
poor management or political corruption or warfare. Others because of colonial style exploitation.

Printing more money would not help... Unless the money was edible... Or could be worn as clothing, even.

But that would be silly...


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Answer 4

What like Zimbabwe ? Your grasp of economics isn't good. At the end of the day the only reason money has value is because we give it so. If there is no value added or goods produced then the money has no value. It is just a piece of paper or a metal disc. The monetisation of the economy just allows us to use this as a means of exchange or a repository of value.

So if you just print more money you get hyperinflation where money rapidly becomes worthless; for example in Weimar Germany where the Germans got quite cross and eventually decided that a small war might be a good idea.

In the UK today M4 money supply is rising at 14.5% and they are claiming inflation is 2.5%. Hmmm, maybe they've heard of your idea and its dodgy economics and are trying it. I expect if you keep your eye on the UK and its dodgy government you might get a practical example of what happens when you try that out !

Answer 5

It would be nice, but you need the gold reserves to back it up. Like, have you ever studied German history at school or somewhere? After world war two they had no money, they were paying back debts as well as the reparations and their factories were blown to bits, so they were very short on cash, so they started printing more and more money without the reserves and it was called inflation - people were getting paid twice a day to make the money worth anything, you'd need a wheelbarrow of money to go food shopping and someone'll nick the wheelbarrow, and bread cost like ten million marks! It's a funny old world!

Answer 6

Many have tried...by printing money without having any backing to it. It canses inflation, everything rises in prices...therefore you need more money...and printing more makes it worse.

The prevailing view in mainstream economics is that inflation is caused by the interaction of the supply of money with output and interest rates.

Inflation has been seen most graphically when governments have financed spending in a crisis by printing money excessively (from war or civil war conditions), often leading to hyperinflation where prices rise at extremely high rates (such as, doubling every month). Another cause can be a rapid decline in the demand for money as happened in Europe during the black plague.

Answer 7

Money holds no value...it's what it is based upon that counts.

A country could put millions of dollars in the hands of all the people, but they would have nothing to buy, since work wouldn't get done.

Answer 8

If they printed more money, the country's money would be worth less than it was before.

Answer 9

Think about the inflation that would follow.

Actually to some extent this is done in US...what's saving the US currency's "bum" is the fact that American dollars are used as international currency in huge transactions, like oil deals, and also as reserve currency by other nations.

Answer 10

Look up "hyperinflation"

The more money that is printed, the less it is worth. This can escalate so much that a wheelbarrow full of banknotes will buy a box of matches.