--

So the bottom line here is that government cannot just print as much money as it needs. It has to be balanced against what is being produced.

When goverment prints money in order to buy resources in the private sector, it devalues the value of money because it is the goods that increase in value. The money becomes increasingly without value.

It's not a matter of assuming that limited dolls are produced - it's a matter of seeing that if government just prints whatever money it needs, the money will become worthless because, at some point, there aren't sufficient goods to justify that much money.

--

--

Responses (1)