Topic: Continuous Printing Of Money Out Of Thin Air Has Never Being The Answer - page 2. (Read 488 times)

They may have no choice

Printing excessive amounts of money is a way to squeeze more juice from the local populace. This has been a viable economic policy since the ancient Greeks and under pharaohs as well (the Romans took the lead soon thereafter). The essence of inflation tax is that the government is the first in line to receive the new money, and thus it has extra buying power for free before prices start to rise everywhere. Indeed, it is not going to work forever, and in the end people will either switch to barter or start using a foreign currency like it occurred in Zimbabwe

I don't think any country of the world will be considering printing of more money at this time. Printing more money without a proportional productivity will only result in the country's currency losing values. No country will want to be another Venezuela at this time a help may not come from anywhere.

America enjoys enormous income from creating money (seigniorage). The advantage of creating currency is even greater when many supporters circulate the dollar to all corners of the world through trading activities. The consequence is that all over the world dollar users come to pay for inflation that results from printing dollars.

As long as the level of user confidence in the dollar is still high, the dollar will remain the primary means of payment. This can be detected from the ability of the US to maintain the stability and sustainability of its economic fundamentals. Even though the US debt level continues to increase every year, the inflation rate is relatively stable with thin fluctuations, and the unemployment rate at a moderate level except when a corona pandemic occurs, of course the unemployment rate rises by accident. So it can be concluded that the US has no problems with its economic fundamentals.

In addition, the FED also has an "unconventional method" to stabilize the economy, namely coordinating US corporations to buy up shares of other US corporations in order to attract dollars that circulate too much in the world.

Seigniorage in the fiat system is a form of theft and seizure in subtle ways by the monetary authorities of one country towards its people and robbery of one country against another country.



Be careful with your expectations. The essence of government and should be the main task of the government is to protect its citizens. Are you sure you can escape the role of the state? Many supporters of democracy in my country, when it was hit by globalization, finally realized that open competition and a borderless world were frightening. If globalization alone had a frightening effect on citizens in developing countries what about a purely decentralized financial system. Who gives guarantees can all get the same access and who thinks of individuals who do not have access to these systems.

I am also a bitcoin fan but I am still realistic that bitcoin will only be an option not a solution for all micro and macroeconomic problems. What's wrong with our economy is that the system is not the lubricant.

The current money printing phenomenon is far too weak to fix the structural problems of the world's big economies. The US has borrowed itself into a lost generation or two of debt. When the dust settles after the war, those left standing will have very different priorities that those seen today.

I will say that printing even more money is not the right solution in this crisis. Yeah maybe it can help to relieve each and everyone's hunger for the meantime but the cons we can feel in the long run could be unbearable. Actually there is no problem with the physical supply of money so printing more of it is unnecessary. What I think is happening is that the circulation is greatly interrupted that's why most of us especially the poor suffers. I believe that there are other ways to fight this. Government could encourage private organizations or rich citizens to reach out for the needy .

The money printing might be a band-aid solution but I think that they are preparing a countermeasure that will combat the possible high inflation, this stimulus solution is very serious because many people are suffering and they need the money right now, maybe if the government are focusing on relief operations like soup kitchens, essential grocery giveaway and such, then they wouldn't have to worry about money, I think that money is not always the solution, this pandemic needs to be looked in a diverse and novel perspective because times are changing and sometimes the old ways are not the best way.

Let's not get ahead of ourselves. It's not economical to spend in the hundreds of satoshis. That can extend orders of magnitude higher during periods of high fees. Lightning as a consumer grade solution is probably 5-10 years out, and that's assuming the economics and network effect work as hoped.

Correct me if I'm wrong but Lightning also faces problematic limits in this sense. If you are transacting in satoshi or sub-satoshi amounts that cannot economically be pushed to the mainchain due to fees (or technically due to unit limitations) the security model is not very strong since the last valid (pre-fraud) channel state can't be confirmed by miners.

I'm not 100% sold on the Layer 2 narrative. I think there is a significant non-zero chance altcoins never go away since all Layer 2 solutions involve significant tradeoffs among security, liquidity, useability, and so on. A global fee market with a spectrum from low security altcoins to expensive mainchain BTC is likely to persist.

The most curious thing is that despite the fact that US is printing money like they breath air, it's value is gaining more and more strenght in some countries, paradox, right?

I wouldn't call politicians to these rundom people. Everyone who states silly statmenets, calls politicians to themselves. For me, politicians were Ronald Reagan, Abraham Lincoln, Winston Churchill and similar figures.
And we don't have economic experts or in overall experts in different fields, if you call youself an expert, then you mustn't be a minister of economics that's falling.

That's a question of time, when will current system collapse? Because technics and etc are going all against it. They analize our behaviors, what we buy and when, where we go, what's our basic health conditions (by fitness trackers) and so on.

The thing is, where is this money going to end up with? That is a very good question to be asked. I mean the part where the people get is the part I get because they are going to spend it on what they need. However one more thing is there, the money companies gets.

These are not companies that work only in USA, these are global companies. Let's assume Apple gets some money right? I am not saying they do, but let's assume it. They are going to spend all of that money on manufacturing new phones and selling it basically everywhere in the world. What does that mean? Apple basically got all those phones for free and they made a profit from it and took all of our money whereas we actually spent real tangible money that we worked for. So basically USA does get a lot of financial profit from this printing while rest of the world may not.

   I agreed with you Icy, one day we will have a crypto-world, governments will
have to surrender. That fight began, and it will last for many more years, and
money printing can accelerate economic crash.
   I also believe that crypto-currencies are superior compared with current global
economy, it's why we will win, it's why I think it's just a question of time.

Well decentralized and safe cryptocurrency could advance in such a way that many governments will have no option than to surrender to it.
Truely decentralized cryptocurrencies are by far better than the current fiat currencies. Their core principles (like decentralization, transparency, immutablity, security, permissionless/trustless,, anonymity/privacy, censorship resistant,deflation, etc ) are part of what make them great and superior.
You could develop a great cryptocurrency project by sticking to the principles and building whatever you want that is good.

The US budget deficit is financed by external actors

In this manner, it is not a "budget deficit" in the sense most people think of it (as expenditures exceeding revenues). It would be such if America were the only country out there. However, it is not, and it's other countries which are going to pay for its "deficit" (say, China, as we are already heading in that direction). But you are right that it is a tax, though this tax is levied on and paid by other nations. Basically, the US is exporting inflation, and that's one of the reasons the internal inflation rates remain anomalously low with so much "money printing"

Unfortunately,money printing is the answer for the US government,when it comes to covering their enormous budget deficit.
Funding the deficit with newly printed money by the Federal reserve system is creating the effect of the so called "inflation tax",which means that resources are being secretly taken away from the people for the government,by devaluation of the national currency.If money printing stop,can you please explain to me how the US government is going to cover their budget deficit?By rasing taxes?I don't think so.
Bitcoin is an alternative,but it will never be adopted by any government in the world.

That's not always the case. If we just print an insane amount of money out of thin air and then inject all this fresh money into the economy, in normal circumstances that will most certainly result in inflation rates surging according to the famous Fisher Equation. However, this equation works both ways specifically because it is an equation, i.e. when you change one side (decrease or increase it), the other side changes proportionately

In practice, if people are not working, for example, due to quarantine (read, they are forced to stay at home), the amount of money available to households drops abruptly. Then it makes perfect sense to fill that void with helicopter money in order to keep the identity. Indeed, in the long run the production will plunge too since no one works, but there is a definite temporal lag between these two events, and filling the gap with free money is a rational choice

To sum it up, it can be a valid short-term solution (apart from other non-economic benefits)

But that also means depreciation.

The value of fiat will obviously fall down, it is not the answer nor the solution, it is the reason why there will be problems in the future and the reason why some people might turn to cryptocurrencies mainly Bitcoin.

It has been an usual practice for all the governments to print their fiats out of no actual reserve with the plan of burning them out later. Some governments go printing money first and then start working on getting up gold reserves with taxes/interests incurred from the business which got bailed out using the newly printed money. I read USA went for bailing out few corporate after the 2008 recession but collected back all the money with least interests. We are not knowing all the diplomatic movements of governments but making opinions and suggestions based on what we do hear.

I mean that continuous printing of money may not help any government but we are not supposed to be a position to get aware of all their plans.

Printing more and more money is the answer in a short period until the next hyperinflation each time. The government understands that it's ineffective, and they have to deal with it. Why? Printing money is their tool for controlling the economy. 

If anyone wants to consider how much money is 4.2 trillion dollars, think of it this way, the average mean household income is 60 thousand dollars. 10 families makes 600 thousand, 100 families makes 6 million, 1000 families makes 60 million, 10k families makes 600 million, 100k families makes 6 billion, 1 million families makes 60 billion, 10 million families makes 600 billion and 100 million families makes 6 trillion.

So, we are talking about around 60-70 million households here, not even single person, each family could have average between 2 to 3 people. So we are talking about over 2-3 hundred million people here. YEARLY income of 250 million people could be basically the average of what we are talking about. So USA just printed one year worth of salary for 250 million people. Do you really think those people got it? Definitely not...

First thing I do think one should realize that Money can never be printed from thin Air .
No matter what is done , one should understand that if the government is going to print money it is going to take a toll on their values as well .
If the cryptocurrencies are doing it , it's all based on carefully calculated algorithms , plus mining does require a lot of input , one should understand that nothing can be created out of thin air. It is a lot of hardwork and years of patience.

Unfortunately government has to sometimes print money , during this pandemic they have to actually go and pay bills in the hospitals for most , they have to keep their economy running and I do think that they do know what they are doing.

Central banks of every government prints money because they wanted to make up for certain situations and governments never care about the citizen all they care about the tax money so do you think they will stop printing money and will make bitcoin or other decentralized things as legal tender?

Chances are less though.