Topic: Continuous Printing Of Money Out Of Thin Air Has Never Being The Answer (Read 503 times)

Printing money to cover the state budget could become a boomerang going forward. Apart from the assumption that the corona pandemic is not yet clear and the market's ability to absorb money is unclear. The current condition is that the solution is indeed to cut infrastructure development budgets and other projects to provide a safety net for the people, especially the lower classes who are most affected by the pandemic.

Print money referred to by followers of Modern Monetary Theory is printing money for funding productive projects. Examples of Germany printing money to finance the second world war or China that prints money to fund production. The government must be able to formulate sectors whose demand is relatively stable and can still be increased and can absorb a lot of labor. Because the effects caused by the pandemic caused the government to pour out extraordinary fiscal and monetary stimulus, the printing of money must use a more efficacious combination.

The government must spur an independent industrial sector where capital is in the form of the local currency, the raw material is domestic resources, its workers are also citizens, and zero imported products. If it can be absorbed by the export market, it will greatly help increase the country's foreign exchange, even for the fulfillment of domestic consumption, it is still effective in turning the economy around.

Printing money is not for the trading or service sector, it must be the production sector so that the supporting wing industry can also move apart from that which is different from the trade sector which is fortunately limited, and its increase is limited, the production factor can be 10-30 times the profit and increase.

I I'm responding based on what I have read in economics that money one of the ingredient of money is that it is generally accepted but for crypto, I'm sure it has many people not accepting it which answers your question.

Central banks of all the countries of the world have passed unlimited relaxation policy throughout the pandemic process and continue to print money continuously. As such, incredible inflation rates and many other economic problems are inevitable. If the central banks continue to print money unlimitedly, I think that huge economic problems are waiting for us, including the coming days, and the people will become poorer and lose their purchasing power day by day. In addition, since the process of recalling these coins, which are put on the market today, will take a long time, this will bring with it other economic problems. I think that unlimited money printing should be stopped and tight economic measures should be taken as soon as possible, I wish the money supply of central banks was limited.

I think we are at a time when the government really need to draft favorable cryptocurrency regulations. The industry is that matured already.

Considering the comments of economist Nill McKinnon, the US federal reserve has already taken very tough and large-scale steps to support the economy, which includes supporting small businesses, as well as the banking system and other sectors of the US economy, which to some extent may exclude the possibility of an increase in monetary masses to avoid global inflation.

Globalization requires every country to have quality human resources so as to produce high productivity and innovation so that the products produced can compete with other countries. If people cannot compete with foreign nationals in their own country, how can they compete with foreigners abroad. Product competition is commonplace and I believe that each country can survive, but what I worry more is competition at the individual level to get jobs. It is very ironic if in a country the unemployment rate is high but a lot of foreign workers are absorbed by the manufacturing industry in my country. Therefore, why each country can decide for themselves when their people are ready to face the era of globalization.

We take a simple example of Alipay's plans to operate in my country. An aggressive China wants to invest in the tourism sector with a narrative of strengthening the development and growth of my country's tourism. China built a hotel in Indonesia, China built a tour and travel company in Indonesia, China opened a restaurant, China opened a souvenir shop, China hired a guide from China and all payments through Alipay. Indeed, my country developed because of Chinese investment, but there was no growth in my country because the foreign exchange that entered my country was small to pay for overhead and vendor operations outside of Chinese companies, in other words, money only revolved in China even though the project or business was in my country.

The difference is thin between competition in globalization and exploitation. Globalization is not always sweet fruit. Globalization is also one that brings the spread of pandemics evenly throughout most of the world. Getting used to life manually is also needed at this time so that when the world that is online and connected is disconnected we are not too depressed. Globalization is not a necessity but only a choice.

Printing money to save the economy is fine but of course there's a lot of consequences because of this and maybe the inflation will rise up to those who print a lot of money. This is the disadvantage of Fiat currency because every year its value become more lessen which can't be stopped by anyone. This might not be the best answer but I know the economist knows this thing, well we are lucky to have bitcoin on our side. Cryptocurrency still need to grow, and maybe in the future this currency can help us on a calamity like this.

I understand your point of view, you fear that developed countries with more advanced and optimized production cycles will push retrograde industries of developing countries out of the market in an open competitive environment, but that’s the way of the progress. If someone adopts more advanced means of production, the ones sticking to traditional ways and trying to protect themselves with artificial restrictive measures are destined to an inevitable failure. Evolution consumes the weak. What’s the point of living in villages and digging in dirt in the era of technological singularity?

Decentralized blockchain is very different from globalization. In globalization, there is still a third entity that regulates whereas, in decentralized blockchain, there is no governing entity. We also have to realize that many of our brothers are not ready for technological advances let alone algorithms.

We know and understand and have used blockchain and bitcoin but we must be realistic that bitcoin cannot be a solution for all the world's economic problems and apart from that our society is not ready to accept total change. The ambition of globalization is more the ambition of the owner of money rather than the ambition of the middle class and the poor. Because globalization opens wide opportunities but also invites threats, especially for countries whose societies are still underdeveloped.

Even the trends that have arisen in my country have begun to compare to the better times of the dictatorship, although they have to be careful in talking but there is no hunger, development has also entered the villages, than in the current era of democracy, but many people die because they cannot eat. Peaceful globalization can only be realized if prosperity in the world is equal.

If inflation is already in the way which is more likely because some already have declared that were in the recession even cryptocurrencies aren't immune to the inflation. Yes it won't be directly affected by the supply of fiat but if the inflation will be too big its effects would come across all kinds of assets including cryptocurrencies which honestly speaking is getting its value in fiat equivalent. So even if BTC is valued at 9,500$ this time and during the high inflation rate those 9,500$ worth of BTC will have the same purchasing power as a fiat currency.

There is a recent tweet by Robert Kiyosaki about that issue where they say the printing trillions of money can become solution to revive the economy. That is also the reason why he encouraged the public to buy bitcoins than to stay and hold cash. I'm sure that there will be hyper inflation that will happen especially if they will keep printing trillions of money. We should remember how the law of supply and demand works in every types of economy.

Now is an honest time to shop for Bitcoin and Crypto wise people must attempt to buy and hold for an honest profit. However, thanks to the crisis within the country, the economy has been severely hampered, so it'll never be possible to print uninterrupted money out of nothingness at this point nobody will prioritize it and therefore the financial system of other countries as a leftist is far weaker.

And that instantly puts us back to square one

That is, whether the quarantine was any good in the first place. Just a few days ago a Nobel laureate in chemistry (Michael Levitt, to be exact) came up with the idea that it probably killed more people than saved (apart from ruining the economy). As he sees it, indiscriminate lockdown measures were a mistake because in all countries which were affected most by the coronavirus outbreak, the death total levels out at roughly the same fraction of the total population, no matter what measures had been taken to fight the pandemic. That essentially confirms that the quarantine was pretty much useless. In other words, the cure turned out worse than the disease


It works but does so very much according to the law of diminishing returns, and the response curve goes down abruptly after some point

The question is ....Do they have a choice? If they leave the pandemic to play out and people are laid off by the millions, then the economy will collapse and the Dollar will then also collapse as a global reserve currency. So they artificially manipulate the system to generate spending, so that the US economy and businesses can get a boost to survive.

It is a knife with two sharp ends, because left without help, the US economy will collapse... so by injecting that "help", it keeps the economy alive and the Dollar stable. 

I am currently fully into Cryptocurrency because the move by USA in printing of money will spell financial doom for the world economy and my nation won't be are from this economic virus. Wise people will buy bitcoin and other good Crypto project.

I really disagree with that, it is too obvious that if you print a lot of money, the money itself will become useless. It's value will become lower than you can imagine so it is really not the answer, no matter what rules and regulations you put to that. As what you've said ineffective, as you print a lot of money, the economy will not grow because of increase in the demand especially in the basic necessities if everyone can afford it.


Yes, this is right, but it seems that printing money is not the answer for the growth of an economy, proper manipulation and right regulations are the key for us to improve and grow our economy. The government should know the importance of money printing and they should tell it to the people so that they know what are the effects of it in the market.

I completely agree that second layer solutions are not the answer to the scalability issue. Lightning or any other payment channels network is simply a separate payment system, which is connected to Bitcoin, but is not a part of it. Moreover, its properties radically differ from the first layer, which will certainly become a problem for general audience, as common people will not be capable of understanding the difference correctly. If you want to read a bit more on the matter, you can look here, starting from page 120. Moreover, claiming that Lightning can solve the scalability issue is the same as claiming that fiat can solve it too - simply convert bitcoins into USD, perform any number of transactions you wish and buy bitcoins again in the end. How is it different from payment channels?


The matter of inflation is not that simple. During the 2008 crisis, the FED issued more than 4 trillion as bailouts, which surprisingly caused near-zero effect on the inflation rate (as a price index). BTW, inflation is not bad and some small rate should be always maintained to avoid a liquidity trap, which is one of the reasons for QE (or printing money) to be applied. Moreover, a liquidity trap and the subsequent deflationary spiral can be even more devastating than hyperinflation.


But don't you think that developing countries are such, because governments protect only a small fraction of their citizens, particularly elite groups? On the example of Singapore, we can see that developing countries do not stay long in such a state, once a person comes into power who actually cares about the citizens. I live in a developing country too and I embrace globalization despite any frightening effect, for I prefer any difficulties it can bring instead of living under the power of these scum in the government. Same with crypto - I would prefer an algorithmic decentralized system instead of scammers who fill their pockets at my expense.

The old model of finance is how things are moving even today and the government is not taking a look at other alternatives rather than printing money when there is a shortage and it will lead to inflation in the near future, but the problem is not solely in the US, most of Europe is following the same strategy for decades

The government will not be willing to back the currency with any commodity when the economy is struggling already and facing inflation and cryptocurrency is not a complete solution for the situation either.

Image when government will print more money and then purchase the commodity and then claim that the currency is backed by something  . These drastic changes should be taken when the economic situation is running smooth and not the verge of crisis.

Honestly, I would not even think about the global scale, because In any case, there are countries that will oppose cryptocurrencies, because this will oppose the economies of these countries, and in the future, may reduce tax revenues from the population.

Well, you are absolutely right about this but I doubt that this would help to cryptocurrency to get easily accepted in the society. Even this could be possible I don't think the said same manner would never be seen after all. 

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.

Those who are against this kind of financing model are the ones with huge amount of saving in their bank accounts of course they will feel like they are robbed. But for the less fortunate, they will gladly want to receive the funds to be distributed to them.

The current system I think is already collapsing and the time for the fairer system to emerge is probably today when everyone is suffering from this crisis. I think its not really Bitcoin but still an immutable blockchain of digital fiat.

Well, that somewhat undermines the whole idea behind it

Namely, that its future is set in stone, in a way. I've seen it a lot when people were bragging about its unchangeable, rock-solid nature like there are only 21M bitcoins to mine, reward halving coming about every 4 years, and so on. The issue of divisibility is technically irrelevant, that I agree with. However, it will become an intolerable pain in the ass economically if Bitcoin is to become a means of exchange. It won't but no one can stop from assuming that for the argument's sake

Um, yes? Ever heard of divisibility? Ever heard of layers on top?. Bitcoin is not static. Its future is not set in stone. The potential is there for it to become whatever people decide they need it to be

Do you think 21 million bitcoins can supply more than 8 billion people worldwide? Do you think bitcoin is truly valuable when there are events like Bitcoin halving or limited supply? all of that is just what Satoshi set out to control this decentralized market. This is a mechanism for those who like to manipulate and create new games without the law. Bitcoin should not be used for payment, it should only be used in decentralized markets.

It shouldn't cause a significant rise in inflation rates

First, it remains to be seen how this money gets into the economy. In early 2010's the Fed ran three rounds of quantitative easing, and somehow it didn't lead to a boost in inflation. Then, if this money takes place of the money which wasn't earned, it won't cause inflation. It is kind of accounting identity (if you know what it means)

On the other hand, the money is intended to support the consumer demand as otherwise the producers will be hurt terribly (that's why it is called an economic stimulus in the first place). As such, it is much worse than inflation. Indeed, it is still a short-term measure overall, but there are sound and pretty solid reasons behind it


Now come up with the stats how much wages have risen during this amount of time, just to keep things in perspective

Some may think that printing money is an internal matter of the US, which is partly true - but since the US economy is not something that can be separated from the world economy, the whole world is likely to feel the consequences of such actions. But the US is not an isolated example of such a policy, similar things are happening in the UK and the EU, although the amounts are much smaller, and citizens do not receive stimulus checks to their home addresses.

It is obvious that there are those who advocate this model of financing and those who are against it, but I think at least two things matter throughout the story : The first is that it is easiest to follow the line of least resistance (in this case printing money), and the second is that politicians are only politicians and not experts, so we cannot expect smart moves on their part. What they are doing today is likely to have consequences for future generations, but I think they can live with it - after all, no one lives forever and only history can judge them for their mistakes.

Cryptocurrency as Bitcoin can hardly become a solution on a global scale, such an idea does not fit into the current world order, and it would be foolish to expect any change in the near future on this issue. The world will continue to live by the old rules until the current system collapses completely, and then it is possible that a new, better and fairer system will emerge.

With continuous money printing, the world will be stuck in cycles of deep recession every decade

As a measure to curtail the household hardship instilled by the ongoing covid-19 pandemic, The United States has already pumped in $2 trillion into the public, and is currently proposing another $2.2 trillion bringing the number to more than $4 trillion. The chief cause of currency devaluation is excessive money printing by the Fed.

They print trillions out of thin air and render the value of the dollar worthless in the long run. For the records, the U.S dollar has already lost more than 96% of its value since 1913. If the same narrative was true for Bitcoin, you and I won’t probably be talking about Bitcoin, we would have counted our irredeemable losses and moved on.

With the possibility of deep inflation already knocking at the door, a commodity-backed currency or a full-scale adoption of cryptocurrency could be an answer to this continuous cycle of currency devaluation and economic meltdown. Now, the big question is, is there ever going to be a time when crypto will be fully embraced as legal tender on a global scale?