What is the criteria used by a nation to print money? Why can't it just print whatever it needs?

Question

Is there someone who controls the print process within a country?
thanks for answering..

Answer 1

If a country just keeps printing money it has less and less value.

Answer 2

When a country prints money that is not backed by gold reserves, it devalues the existing supply of money. That is called inflation.

For example: If the country has 100,000,000 of gold-backed currency in circulation, then prints an additional 100,000,000, the value of each unit is reduced to .50. In the United States, that would mean that the dollar in your pocket would suddenly be worth only 50 cents. If you have been saving all your life, your savings would diminish in value. When the value of our money goes down, the cost of goods from overseas will rise proportionately.

In this country, the Federal Reserve controls the production of new currency. The Federal Reserve Chairman goes to great lengths to keep inflation from destroying the value of our currency.

Answer 3

if that currency is backed by gold or some other standard commodity the more they print the less it'll be worth. For example if the USA has 10 pounds of gold, and issues $10 in currency, each dollor is worth whatever a pound of gold is worth on the international market. If they print $1000, then each dollor is only worth 1/100 of a pound of gold.

in countries such as China, the government just sets a value on the currency, which is fine within that country, but reaks havoc on international trade.

Answer 4

>.< Printing money does not create money. once you print extra money, all you do is decrease the cost. you may't create money out of skinny air. the basically element the authorities can do to remove the deficit, is strengthen taxes, or decrease spending. raising taxes outcomes the business equipment, with the help of proscribing the spending technique of the buyer, and proscribing the hiring technique of the corporate. raising taxes is likewise restricted to the flexibility to pay the taxes. slicing spending is less difficult, yet harder to finish because of offended lobbyists on the politicians door steps. the superb element to do is decrease spending, and institute a flat tax. A flat income tax will produce the same quantity of tax gross sales because the present inventive income tax with basically a 8% tax fee (with out deductions) ---------------------------------------... interior the previous we had some thing called bimetallism, the position the overseas money is made up of Silver and Gold. Later we began printing economic company notes which replaced into problem to inflation. to unravel the inflation difficulty we switched to the optimal, which gave the business company notes a cost depending on the gold reserves. as we talk each u . s . interior the international makes use of fiat money, which really ability all money even funds have a collection cost known with the help of the authorities. even although the cost of fiat money does not replace, because of inflation, and international commerce, the flexibility of the overseas money can change into weaker or superior with regard to global economics, so the change fee will replace, and the dollar will purchase a lot less.

Answer 5

because the money must have value not just numbers printed on it ( in Germany at the end of WW1 people would use wheelbarrels full of money to go shopping because the money had no value - imagine a candy bar selling for $ 500 and you will get the idea )

Answer 6

The US Dollar is no longer based on gold... good try tho. It used to be, now it is currently based on the belief that that is what your money is worth, its based more on the stock market than it is gold. As for your question the guy with the less value answer is correct.

Answer 7

the US economic system used to be based on gold in reserve. But we have printed more than that and the world economic system is now based on the USD. Since we print and spend more than we should that is what causes inflation to occcur.

Answer 8

They have to have a sufficient amount of gold to back up the new printing. Thats the point of fort knox in the U,S. Without the gold to back it up the currency would be devalued.

Answer 9

They have to have the gold to back it up.