Printing money

DeletedUser28464

I don't think the common American realizes how printing money impacts a nation's economy and also the world economy.
Here are a few simplistic analogies that well illustrate some of the problems.

Let us say that I am President of the US and I have a money printing press in my basement.

Situation 1
I borrow 10 dollars from Donald Trump. I rush to my basement and print a dollar. The question is: How much do I owe Donald Trump? You might think 10 dollars. But, Donald Trump is no fool. I actually owe Donald Trump 11 dollars. For by printing a dollar, Donald Trump's 10 dollar bill is now worth 11 dollars.

Situation 2
Donald Trump sell's a Donald Trump tie for 10 dollars. I rush to my basement and print a dollar (I'm the president). Donald Trump is no fool, he immediately raises the price of his tie to 11 dollars (which is now the real price of the tie).

Situation 3
Donald Trump's son and daughter earn 10 dollars an hour. I rush to my basement and print a dollar. Donald Trump's son and daughter meet their father in the boardroom. They immediately request a salary of 11 dollars an hour.

Situation 4
Donald Trump sells his ties overseas at 10 dollars each. I rush to my basement and print a dollar. If Donald Trump doesn't change the price, he is effectively putting a discount on his ties.

I hope you see the trend here,
Pedro
 
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DeletedUser22575

If I am the President I should impose a special tax on Donald Trump.
 

DeletedUser

That's the reason why gold is the base of all currency: there is a limited amount of it. Sure, they mine gold every day, but still they know that it will run out eventually. Printed money never runs out(unless we cut all the forests that is).
 

DeletedUser

eliel007 said:
That's the reason why gold is the base of all currency: there is a limited amount of it. Sure, they mine gold every day, but still they know that it will run out eventually. Printed money never runs out(unless we cut all the forests that is).
Click to expand...


except we havent been on the gold standard since fdr and later nixon
 
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