how come the U.S cant just keep printing money to be super rich?

Question

i sound stupid lol but can someone please explain it

Answer 1

because the more money you print, the more its value goes down.

Answer 2

Under HJR-192, the US Dollar is actually backed by US Citizens and their purchasing potential. Through various (in)voluntary contracts, an account is set up with the US Treasury and your birth certificate is traded on the Global Futures market (going rate is around $1,000,000 a birth certificate, which is supposedly the average dollar amount an American Citizen will spend in a lifetime). The Monetary Control Act of 1980 allows for any document with a signature on it to be monetized and used as a promissory note on the Global market, creating more revenue.

Why did this happen? In 1933, the US defaulted on its debt to the banks that made up the Federal Reserve. The results were similar to when a corporation defaults: liquidation of assets.

Answer 3

True wealth is actually backed up by something that paper money can be redeemed for. If everyone was given twice as much money in paper than they have now, they WOULD NOT BE TWICE AS WEALTHY. The reason is simple. Say you could currently buy a fairly big cup of coffee for a dollar. What would happen if the government just printed up money so that there is twice as much money in circulation as there is now ? That cup of coffee would THEN cost two dollars ! You would have ultimately gained no purchasing power because you had twice as much paper money.
The reason for this is that the seller of the coffee as to compete with other sellers and buyers. If he continues to sell coffee at a dollar a cup he has not benefited from the increase in "money" , and he has put himself at a economic disadvantage to those who now would have more purchasing power than him because they have increased their prices because more paper money is in circulation to pay for it.
If paper money doubles and I continue to sell for a dollar a cup, and my competitor sells it for two dollars, you will have more money to outbid me on say a house.
Don't think because I'm willing to sell the coffee at half the price that I will make more money than my competitor. Because everyone will just keep decreasing their price until the cost of preparing the coffee isn't worth selling it anymore at even a very low price because all coffee producers would end up losing money. Does that mean that you as a consumer would then have plenty of wealth left over ? No because everyone else is doing the same thing ! Anyone that produces anything would stop producing ! You will be left with a bunch of worthless paper because nobody will accept paper money for goods because there are no goods being produced ! So instead of doing that the producers will collectively just increase the price which will lead to inflation.
As a side note to all of this, this is why they tell you not to put money from the bank on the Free Parking space in the game Monoply. If you do something like throw in a $500 bill whenever someone lands on Free Parking, Boardwalk which originally sold for $400 will now be selling for like $2000 by whoever owns it, because they will be looking around the board and realizing that there are plenty of people who have the money to pay for it. Having $8,000 in Monoply money because you artifically put money into the game will not increase your purchasing power because everyone else can still compete with you for the same goods just like before because they ALSO got money from Free Parking. Which of course defeats the whole purpose of you having the extra paper in the first place.

Answer 4

Well actually since the US doesn't use the gold standard it does print money how it likes. asically the rest of the world want dollars because it is the only currency you can buy oil with (except from Iran and Russia and Norway who accept Euros). Because these countries need dollars they have to trade with the US i.e. sell goods. The result is that the US keeps printing these dollars to buy foreign goods. i.e. getting something for nothing.

This results in every country using the dollar as their reserve currency. BUT when the bottom falls out of the oil market or the petroeuro gets introduced )OPEC are considering this) nobody will need dollars any more and they will get rid of them. That is when the recession hits with massive inflation and the dollar will become worthless.

Answer 5

Actually, it does. However, money is just paper and in and of itself is virtually worthless. Therefore, theoretically, it's supposed to represent something valuable like gold or silver which is theoretically stashed away in government institutions like Fort Knox.

As you can see though, the more money printed, the less value each bill has because the precious metal which it represents keeps getting represented by ever more paper bills while it remains the same size and weight.

Governments do all kinds of fancy bookkeeping to keep the constantly chipped away value of the paper money from being too obvious and will continue as long as we're all willing to share the illusion that the paper money is still worth something. Nowadays it's not pegged to gold or anything else;, it's just free-floating, which means it's worth whatever the market says it's worth, when actually, that's a euphemism for an agreed upon illusion, which is even shakier, cuz markets dry up or crash. As long as we all agree to the illusion, however, it works fabulously -- for the time being.

Just think nowadays, we use digital money! It doesn't even exist in any form except as bits of info. However, as long as we all buy into the illusion that it has value, guess what, it has value.

What holders of US dollars have to think about these days is countries, especially oil producing countries (Saddam was going to to it in April of 2003 when the US attacked in March), switching completely to the euro. That plus the world is running out of profitably extractable oil fast, both of which, along with other converging catastrophes are likely going to wreck the economy of the US and the rest of the planet as well. Get ready for a rough ride in a few more years if not sooner, especially if all your investments are in US dollar accounts.

Answer 6

It is just like you print as many tickets to your show depending on the number of invitees and the stuff you have to support. The more you print then you have no food to serve them all and the crowds at the gate stranded will give a poor picture to the would be invitees and sponsors and no one will have faith in your shows. Better this way to explain rather going into the gamut of macro economics.

Answer 7

Germany did that very thing after WWI, there was so much money that it became worthless and children would use blocks of thousands of Marks (the German dollar before the Euro) as toys. Paper money represents gold or silver and when you print more money than you have in the material it is representing, the bill becomes less and less valuable than what it is supposed to represent, and if you do it enough the money will become worthless.

Answer 8

Think of money as being the same as any other good or service. If it is plentiful it is not worth as much. If we print enormous amounts of money we increase the money supply - and so the supply of money outweighs the demand - and the value goes down.

This means our currency will be worth less in terms of other currencies and also in terms of what it will buy here.

It isn't that stupid though. In Germany after WW1 they deliberately increased the money supply to devalue the Mark. This allowed them to pay off massive war reperations that were valued in Marks for very little.

Answer 9

The degree of wealth isn't funds. it is the potential to produce products and centers -- it is, "productiveness". human beings in Africa starve and don't have drugs because of the fact their African usa does no longer produce sufficient nutrients and produces little or no drugs. only printing extra funds does no longer enhance a rustic's productiveness. human beings can no longer consume forex. Printing lots of forex does no longer fill the tummy, it basically supplies human beings extra funds with which to spend on what little nutrients there is. too plenty funds chasing too few products basically leads to inflation and no enhance in wealth. you're no longer any doubt familiar with being surrounded via lots, and you're thinking in case you basically had extra funds, you will desire to purchase extra stuff. yet you're basically one guy or woman surrounded via the manufactured from hundreds of thousands of people working. Having extra forex expenses floating around does no longer artwork for society as an entire, and it actual does no longer artwork for extremely unproductive African countries.

Answer 10

The money would be worthless. Wealth means they have something noone else has, so you cannot print yourself out of poverty. For money to mean anything at all, there must be a hell of a hell of a lot of people who haven't got any. This is why all economies are essentially dependant on poverty.

The word you are looking for is Inflation.

Answer 11

Paper money is a stand-in for real wealth. Paper money has not real valvue only a agreed valvue. That valvue is related to the amount of cash (paper money) in curculation. if you print to much or if your nations debt is to high the valvue of your money goes down.