General Discussion
In reply to the discussion: How long can the Trump government fund it's way out of a great depression? [View all]Chainfire
(17,757 posts)The value of money since 2009 has dropped by about 22%.
Do you think we can print trillions of dollars and not devalue the money? If so, then why haven't we been printing that kind of money all along. Hell, we could just print ship loads of the stuff and pay for all of our imports. We could be debt free for the cost of a few thousand pine trees and a few truckloads of ink. The government could just hand it out the stuff with the flyers in your mail box. We could all be millionaires. (and we may yet)
There is a certain amount of real wealth in our nation. We calculate the value of that real wealth in dollars. Think of the real wealth as a apple pie, with currency representing individual pieces of the pie. If you start off dividing the pie into four equal pieces, you can get a belly ache from eating one piece. If you cut the same pie into 24 pieces, you still have "a piece" of the same size whole pie, but if you eat one, you are going to still be hungry.
If you print money, willy-nilly, there is going to be a hell of a lot more money, but no more real wealth. How does that affect the value of the money? When you are spending trillions of dollars, not out of your rainy day savings account, but by printing money, you have to affect the value. The government is, in effect, counterfeiting money on a grand scale. If you started counterfeiting money it would cause the same effect on the economy, that is why they would send the Treasury boys after you. It is not the money that is valuable, it is what it represents.
Just out of curiosity, what do you think is going to happen to the price of pork and chicken over the next few months as the supply drops? Do you think that that widget you bought, that came from China, in Jan. is going to be cheaper or more expensive in the following months?