Why can't we continue to print more USD?
Many developing nations are happy to take USD in exchange of real goods & services. We have been printing since 70s after Nixon took us off gold standard & DXY is still healthy. Is it because other nations are afraid of US military & economic power that they keep sending us real stuff for printed USD #tech #economy #investments #personalfinance
Where is the value derived for the newly printed dollar? Does the newly printed dollar have a dilution impact on dollar value?
Not necessarily. It just depends on demand and supply of the goods in question. If dollar was actually diluted in value, gas would not be cheaper today than it was 10 years ago. Tech products and entertainment are also at all time low prices
Lol have you guys not heard of inflation?
I think there is a sweet spot. After that countries will start feeling the need to diversify and look for alternatives.
Printing it de-values it
Then why is gas cheaper than it was 10 years ago
Exactly. I don't see any devaluation
It is about controlling inflation and inflation expectations. If you increase the money supply too much you will devalue the currency. To some extent, mild inflation is good. However, it can get out of hand and then everyone’s standard of living decreases unless wages can keep up. If you’re curious about historical examples look at inflation in the US in the late 1970s early 1980s.
We did not have iphone and internet back then. Tech is deflationary
Yes, but you can’t eat an iPhone ( well you probably shouldn’t). Lots of technology is deflationary, but most physical goods are not. Although most people on Blind would be fine, many people would not be if inflation gets too high. Wages in the US for many workers have been stagnant for years. Although lots of geopolitics was involved with Zimbabwe, they experienced hyperinflation in about 2008-2009. That’s close to a worst case examples of inflation and it would likely not occur in the US for many reasons… regardless of what politicians say. Then again with economics, the opposite can happen from intended consequences. Japan tried to inflate their way out of their deflationary cycle with what was called Abenomics. It didn’t work out they way they intended, but that might have had something to do with the aging population.
There finite is a pool of value (goods and services) addressable by USD. Printing more USD without increasing the value pool dilutes the value of each USD in terms of the amount of goods and services it can buy
Harambe, why is my Netflix so cheap then?
Huh??
Yes US should print more by offering better unemployment benefits. Job market is way too saturated rn and low paying jobs don’t pay enough for ppl to join
It’s almost entirely economic. China could easily tank the USD. The problem is that this would also destroy the value of the USD they hold along with a huge chunk of their economy once Americans can’t afford to buy enough of their stuff.
I feel the only major issue with China is it is run by tyrants. So many chinese entrepreneurs still want to buy houses in US and migrate here which requires USD.
🇺🇸 will turn into Venezuela 🇻🇪
We have guns & nukes. What are you talking about
Lol ! 🔫 & 🚀 is less dangerous, Lazy countrymen are more . All this bill printing sends you on your couch
You have the correct intuition: if other countries want to save in USD, we *have* to print more or else it leads to a depression in our economy (which would be stupid). People then say "okay but someday they'll start spending those dollars". Well two things - yes at that point it makes sense to start running surpluses to drain the excess dollars. But also, other countries can only spend USD by buying our exports. This would mean a US export boom, which is what a lot of people want anyway. At the end of the day, you always have to match the budget with the demand for savings in the private sector. If the private sector wants to save and we don't print, we get unemployment. If the private sector wants to dissave and we print, we get inflation. But there's no correct amount of savings. You just have to accommodate the demand.
Because one day the music will stop and we would have dug too deep of a hole to get out from?
Future us can worry about that, let's live like the Romans in the meantime
There is no hole