Dollar, Bitcoin, Inflation: Why can't the government print money?

投研双杰 view 1302 2022-1-24 10:36
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On March 23, 2020, Fed Chairman Powell announced a new version of debt consolidation, promising to buy an unlimited share of US Treasury bonds and MBS with the revenue it needs.


Fed Chairman Powell

Since World War II, the US public debt ceiling has been revised nearly 100 times, from $45 billion to $28.8 trillion, or about $1.1 trillion for China in November 2021) .

So why wouldn't the US directly release $1.1 trillion and pay back all the money it owes China?

Meanwhile, US attorney MMT (Modern Monetary Theory) said:

"Dispatch millions of workers have lost their jobs, being on the streets, spending the night in the polls, and many are struggling to make ends meet."

There are thousands of reasons that prevent the government from helping them, but without money any of them.

Have you seen this and wondered why the United States couldn't invest money to pay its debts to China, feed the homeless, solve unemployment or other problems? ?

Seems like a dumb question. Can I ask a question?

In front of the screen, do you think that's a stupid question?

But I guess that's because in the past people were too shy to ask questions like other employees were brave to lie to themselves.

Do you know the answer What do you think the answer is?

People all over the world are looking and searching for answers to this question.


So what is the answer? Please leave your responses public on the screen.

Answers can be included in one word.


Inflation originally referred to the increase in money in circulation, but now refers to the market phenomenon in which total prices continue to rise and human purchases decline.

To understand inflation, you must first understand money.

You may think that money is not easy, money is money, often equivalents and something you learned in childhood.


So let me ask you another question?

Is money, in turn, profitable?

I agree with Marx that, according to Marx, money is worth nothing and money is worth nothing.

This means that money has no real value. Money is only considered valuable when used to purchase goods.

Don't you understand that money has no real value? Can't buy a car with your money, buy a house, get Bai Fumei and reach the end of your life?

But keep in mind that your money won't be worth it if you left it on the island.

At the waste of the island, Robinson never wanted a sterling note bearing the image of the Queen of England.


Money only has value when you believe it is worth it, this is called the Tinkerbell effect (fairy effect).

The Tinkerbell Effect is a trade term used to describe what we believe to exist, and the word from the elf's Peter Pan story "Tinkerbell" because children believe it exists.

Think about what happens because this impact is not money.

Feel free to search for answers.


This is the biggest "monster" born in 2009. Bitcoin has increased more than 100,000 times since its inception, which can be considered the best "bubble" and "demon" in human history.

In this situation, if everyone suddenly believes that the money isn't worth it, then the money isn't worth it. If everyone thought Bitcoin was worthless, Bitcoin would be rubbish.

Of course, what I just said is the current situation, and it wasn't before.

Money has been around for thousands of years, and when people first used it, it appeared in the form of silverware, and all kinds of useful things and purposes, such as salt, corn, horses and weapons, were used. as financial.

The commodities that we can most easily touch today are precious metals such as gold and silver.Gold and silver are not money, but silver is gold and silver.

Gold and silver, which are commercially available, rare, easy to distribute, have a compact shape and have a beautiful image.

Moreover, with the advancement of commerce and people, gold and silver were never used for social relations during the Marxist period, and thus became the best cashiers used in the world. Gold and silver were also driving forces behind Magellan's discovery of the highlands.

But gold and silver are not easy to transport.

Over time you can deposit gold in the bank, the bank will keep your gold safe and the bank will give you a certificate that you have the gold.

This form can be used as currency because anyone can go to the bank and exchange gold. This form is a valuable tool that shows membership for its true value and use.

Another enhancement to symbolic value is the fiat currency used in almost every country today.


Nothing behind fiat currency. Belief and trust in government, whether it is a good currency, the yen or the euro, always has time behind it and is based on the belief that government money is profitable.

In a young country, for example, for more than 200 years, the American economy has passed at least three exchanges.

The first originated in 1792 when the United States created the United States Mint and passed the Coinage Act, which prohibited the use of European currency in the United States.

American silver was the primary commodity in the form of gold, silver, or copper coins, and its real value was derived from the precious metals it contained and the metal used to make it. Coins are the equivalent of value. face value.


The second was born in 1900 when the United States passed the gold rush.

The monetary system moved to a combination of market and monetary representations, and even in the economic model, the United States moved entirely to the gold standard. To improve time, gold and foil.

The gold standard was a financial regulation ruled by Empire ruled Britain at the time, and with the addition of the United States to the gold standard, the gold standard had become important in the world at the time. The latest country to join the gold standard is Japan.

Gold models have many advantages and disadvantages. Here we will talk about the benefits. The gold standard provides a public basis for global trade, ensuring that trade between different countries remains stable and predictable.

Since all earnings are indexed to gold, trade between countries can be easily counted, which facilitates international trade and gives traders a stable prospect of cross-border trade.

For example, if 1 gram of gold is worth 1 pound in the UK and $1.50 in the US, you can easily decide that 1 pound should equal $1.50.

The third was born in 1971, the year when Nixon suddenly announced on television that the United States had abandoned the gold standard and had come out of the Bretton Woods system into legal tender.


This process continues to this day, so today silver is not recovered from gold or any other treasure.

so,Can you think of USD = Bitcoin? all the bubbles?

What do you think?

Think about it. What if the United States made a deposit (in US dollars) in the US dollar fiat currency system that was not subsidized?

The simplest trade theory (use and demand theory) has the old adage that as a good product goes up, its cost goes down. The less, the more expensive.


As a result, the United States lost money, the dollar rose sharply, the dollar depreciated sharply, and other countries were able to change their money more, that is, the United States government removes advertising money will affect the cross. - border rate (exchange rate).

Also, if the United States could declare free money, it would drive up the price of goods and services in the United States, for example by raising prices.

Because people suddenly have a lot of money in their hands, it will lead them to profit fraud, make them feel rich, and increase the demand for goods and services, it will increase sharply.

Consider this scenario, if the United States printed $300 trillion, in fact now only $6.1 trillion of high energy expenditure in the United States would be transferred to African per capita income. The money is gone so that every American can buy a Lamborghini, success in one now, and Americans have the money to become serfs and singers, all running to buy a Lamborghini.

However, since the number of Lamborghinis in the United States is limited and the production cannot reach 300 million units at a time, the demand increases the price of Lamborghinis. How often will the price be reasonable?

You're smart, can you put your answers in the comment box? (Answers and advice can be obtained from your assistant)

Let others give you examples to help you understand.

Suppose there are four people on the uninhabited island where Robinson lives. Each has 10 fruits, but each has different fruits (Lao Wang, apple, Xiao Liu, orange, Lao Li, banana, Xiao Xian, peach), all fruits are equal (equal to four). .

Suddenly they saw a large apple orchard and collected 10,000 apples, which gave a nominal price for apples.

However, the number of apples increased and the real price of an apple fell, requiring 10,000 apples to replace one banana. The demand for bananas is high.

Eventually, Rao Wang was bleeding, and the ten apples in his hand no longer smelled.

This is just one example, four representatives from four different countries, and the fruits that each represents represent the interests of each country.

Not only can we conclude from a business perspective that printing too much money is not a good idea, but real historical events can also help us understand this big damage trend of printing money. "unlimited" money.

The most recent example is Zimbabwe, which was devastated by massive inflation when it was released at a rapid pace in 2008. Of course, this is the result of the decision not to be released by the President of Zimbabwe.


As Zimbabwe's economy began to slow due to rapid land reform, the president decided to provide more money to further cover government expenses and rising inflation in mid-October 2008.

What is the current inflation rate in Zimbabwe?

Wait. First, I'll provide some basic information so advanced users can understand:

Inflation in the US has been hovering around 2% for a long time, but in Japan it's hovering around 0%. Most investors think a 1-3% increase is best. China?

Currently, the inflation rate in developed countries is around 1-5%, but if the inflation rate exceeds 50%, hyperinflation will occur and a country's economy and economy will gradually spiral out of control and will collapse.

And the inflation rate of Zimbabwe has reached 650000000000000000%, and the value of the commodity that doubles the inflation rate every 24 hours is related to the price.

The Zimbabwean government is trying to fight inflation by issuing more high-profile letters.

The denominations of their currency were marked more and more zero, the Zimbabwean dollar was revalued three times, the last four hours of Zimbabwean dollars were issued, and 100 trillion notes were frantically published in the press.


This allowed Zimbabweans to exchange bread for a currency pair.

To curb inflation, the government clamped down on even the purchase of high-value assets, leading to arrests and jail time.

In 2009, the Zimbabwean dollar was devalued and the run-off against inflation was only weakly controlled. Euro.

Before hyperinflation, a Zimbabwean dollar could be converted to $1.25, but if the exchange rate of the Zimbabwean dollar did not change, a 100 trillion Zimbabwean dollar note would double the world's GDP.

However, if the "African granaries" were "hungry everywhere", 90% of the population would be unemployed, 60% would not have enough to eat, 5% of the elderly would have AIDS, and life expectancy would have gone from 61.6 years in 1986 at 40% decline. . for

But what is even more incredible is that inflation in Zimbabwe is, beyond speculation, only the second highest in human history.

Surprised or "unhappy", is it surprising?

The first country was Hungary in 1946. The highest monthly revenue growth occurred in July of that year, reaching 419 trillion percent, and the commodity doubled every 15 hours, after meals. The consumption rate within the normal range is about 3%, and the total product market is expected to double in 23 years. .will be

The Hungarian currency is the pengo, but as a vicious cycle of currency emerges, Hungary introduced the bil-pengo, short for billion pengo.


To date, Hungary holds the record for the highest profits of 100 trillion pengos, 1,000 times that of Zimbabwe, although it is a strong contender despite being worth 100 trillion Zimbabwean dollars.

Hungary eventually used the forint as a monetary unit. 1 forint is equal to 400000000000000000000000000000000000000000, 4 follows 29 0.

All thanks to the generosity of the Hungarian government.

In 1945, after World War II, Hungary was devastated and turned into a disaster, with more than half of its offices destroyed.


In order to improve the economy and keep people healthy, the government started providing large loans to businesses through banks.

However, the negative publicity of these gains and the decline in domestic commodities on a large scale has led to inequality, and too much money is chasing too few commodities, leading to major disasters as Hungarian pengo purchases plummet. .

This is why the government cannot pay its debt just to print money.

In a sense, a government contract is a government contract that everyone has heard of. Treasury bills are tougher than personal spending, not human relationships.

Take the beggars of the world, the United States and the most valuable countries in the world, for example, the United States now owes $28.8 trillion, of which Japan owes $1.3 trillion and China owes $1.3 trillion. dollars available. It has about $1.1 trillion left (as of November 2021).

You may think that Japan is America's biggest donor, but America's attitude towards Japan, the donor, is not a good friend.

The borrower is the grandson, the borrower is the uncle.

Despite the indebtedness of the US government, Japan and China could not knock on the white door to claim this million dollars.

The US Treasury can declare and buy Treasury bills. The US government pays interest on the contract each year and buys them back at face value as they grow.

Also, if you want to withdraw real money (Japan, China), you have to go to the mall and sell US Treasuries, and the US government can intervene in these markets at any time.


The country is in financial trouble and could be forced to breach its national debt. This has happened many times in history which means you will never get your money back.

However, US Treasuries are generally considered a risk-free item. So-called risk-free assets mean that unless the Earth explodes, US Treasuries will be redeemed without a break.

As a reason, Americans say that the United States cannot do this because the US dollar is the most widely used and trusted country in the world and crime free even in law. .

Do you think the American people are right?

Finally, we use a great example to explain why governments cannot invest in time.

"When money grows on a tree, it's not worth as much as a leaf."

However, there seems to be an example in the United States.

The new corona is a blow for America. Nearly 50 million people have been infected, nearly 780,000 have died, many small and large businesses have lost their jobs, and millions more have lost their jobs. Industries such as tourism, hotels, restaurants and entertainment have been destroyed.


Century-old US retailers lost money

In response to the economic and social turmoil, the US government changed its tax policy and inflicted mass liquidations on all Americans through crime. In other words, a stream of money was released.

Similar to the non-restriction announced by Fed Chairman Powell, the Fed has been buying long-term Fed and Federal Reserve directly from the market since March 2020 to increase market capitalization $4.24 trillion increase in March 2020


US inflation hit a 31-year high of 6.2% in October, driven by strong increases. However, US inflation is still manageable, as Zimbabwe and Hungary were once fixed.


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