Topic: Question about inflation and debt. - page 2. (Read 816 times)

That is already happening right now but that printing of questionable extra bills are exclusively done by the governments and their banking cohorts. It is not done for the sake of the people who don't have enough to even pay their personal debts and basic needs.

Unless there is a world war we are not going back to the barter system, what a country is doing by printing currency like that to pay their debts is the equivalent of fraud, they were lent a certain amount of money that at the time bought a certain amount of goods and now they are repaying their debt with money that is worth a lot less, and by doing this they are stealing from all the people that have worked hard to make the economy of the country a success.

The easiest way to solve your debt as a nation has always been selling stuff you have. Many nations in the world has debt and they found the solution to actually sell the "company" that they have, not every country is like USA where nothing is nationalized, some of the biggest airlines in the world for example is owned by their nations because going into it requires too much money so they end up doing it as a governments.

However, that only slows down the issue, you can no longer have any debt at all, back to zero, however if the issue why you had a debt still continues there is a level where you won't have anything to sell and you will still have debt. If you could limit the things you buy from other nations and start selling more and more to them, you can recover the difference as well.

The value of crypto will be determined by the people itself. So if it is low, it does not matter much for as long as it is quite stable. Even if the price of Bitcoin will reach stability at around $5,000 or even $1,000, it does not mean to say that paper money is going to be better than it. However low the value of Bitcoin in USD is, it still does not take away the features which makes it a world better than fiat. It remains decentralized, borderless, fairly anonymous, and so on.

Not barter but a universal credit rating system can help in facilitating foreign exchange market. Every item of international importance should be given some fixed rating for example, one gallon of petrol worth 5 ratings while 100 kg of onion worth 4 ratings, etc. These ratings could be periodically adjusted due to variation in supply/demand.
Now any country can import goods from any other country without paying real money. The whole system will work on credit system. Debt of one item can be paid off using the credits earned by exporting other items.
If any country is in need of cash flow then it can sell the credits to certain mediator like IMF/World Bank which pay the equivalent amount in fiat currencies by assessing the country's economy. Stronger economies will get better exchange rates for their credits as compared to weaker economies.

We can simply put it as a product when the supply for a certain product is high the demand for it would be low causing for the price to go down. Now, think of that product as the money, when the volume of printed money is unctrolled and numerous many people would turn into buying goods and services causing it to be insufficient for the whole people and in return increasing the price for each goods and services.

I could also see that using the barter system for now is just solving problem with another problem. The fact that crypto is limited supply could bring an end to the massive money printing and therefore saving the whole economy from being overly inflated as well as eliminating any worry that lingers around the people. But, if the crypto being used have a little value and just stuck there, I doubt it will be any better for the whole economy compared to paper money.

The barter system was a primitive way of doing things that could hardly be applicable to the kind of commerce we have in this modern times. The large-scale commercial transactions of today cannot be supported by a simple barter system. And that is perhaps how it is being replaced with a more efficient means of doing transactions a long time ago. We used gold, silver, copper, and other precious stones to make things easier.

Printing money out of thin air is a rampant problem. And the solution is not barter. The solution is crypto. There is no cheating or faking in crypto.

In my opinion, inflation puts a relatively far greater burden on the poor than the middle class. Simply put the poor class has low purchasing power and usually, shopping is done for primary needs. With inflation, their purchasing power will decrease even more so if what rises is the price of food, the effect is certainly greater for the poor than inflation for non-food products.

The higher the inflation rate means the greater the rate of poverty. Inflation causes the real value of money held to go down. When prices increase, money to buy less (purchasing power goes down). people's purchasing power can be said to decrease if the income earned decreases or vice versa, the price of goods and services increases so that the ability to consume decreases. The decline in purchasing power has resulted in people becoming poorer than before.

Indeed the magnitude of the influence of the inflation rate in each economy class and in cities and villages is different. The classification of economy class is based on the amount of income and the effect of inflation is different in each class depending on the increase in expenditure. Inflation will increase spending on the poor class but will reduce spending on the upper class. Whereas the middle class does not immediately feel the effects of inflation, why?

The middle-class is concentrated in urban areas, the middle-class patterns of consumption are secondary and even tertiary needs, namely durable goods and services which tend to be prestige and comfort. So the expenditure of the middle class is not for basic needs so it will not be too influential.

The use of cryptocurrency, especially bitcoin is indeed a preventive measure to protect the value of your money before inflation occurs. The middle class is also starting to have an awareness to save and invest and the middle class is now a millennial generation who is certainly more understanding about the benefits of the digital economy.

But if the middle class would start to invest in stock companies shouldn't that help a lot with the devaluation of their fiat money ? There is always some kind of path to safe some of your wealth for the long-term.

Lately Germany changed their maximum amount of gold you can buy without identifying yourself to only €2k, there were lines of people in the end of 2019 who were trying to transfer some of their paper money anonymously to some gold coins.

The regular inflation is "okayish", because you don't really notice it immediately. It is like the boiled frog, who just never jumps out until he is cocked.

That's why inflation is considered by some as an invisible tax.

This is completely possible and evident in countries such as Zimbabwe, Germany in the past and countries like Venezuela now. Printing money to pay back old debt at the expense of fiat currency holders, specifically middle income earners is nothing new.

Why does it affect the middle class the most? The poorest hold little currency to begin with while the richest own factors of production, whose value will rise in nominal terms in line with inflation. That's also a reason why I think decentralized cryptos is a good hedge against this phenomena ever happening in your country.

Definitely, Printing money to pay debt has an bad impact to the whole country's economy. It will surely cause inflation and the value of money will be reduced. That is why there is a regulatory body which prevents to print money faster that the growth of the real fiat.

It is not advisable to pay debts with printing money, because it will have a bad impact in the future. One of them will be high inflation,
if this happens fiat will lose its value. Then the government would rather increase taxes than pay debts with printing money. So no
wonder for the government tax is very important, because tax is one solution to pay debts.

I think the printing of money in a country that is in debt will further increase the problem. It could lead to inflation.
This is because a country that is in debt means there is hardship.  Debt repayment is not usually solved by printing of new currency.

of course printing more money to pay off debt is a very bad idea, because it can have an impact on the country's own currency so that it can become worthless. increasing the results of natural resources for export or import is an efficient way to increase the value of a country's currency, this way has been done to date by most countries by establishing cooperation between one country with another country that has agreed on an agreement. and the barter system is not an effective way because it is an old-fashioned way before currencies were created to make transactions

If based on the textbook we learn in school the answer to good debt management is a way to pay off debt. Simply put, in order to be able to repay debts, the state must have a surplus of its budget, if it is a deficit, how can the state repay debt? Talking about government income usually relies on taxes, exports of goods abroad, grant funds, or like Malaysia where the people contribute to repaying government foreign debt. All policy instruments are equally important in achieving development goals. All of the above policies must work together effectively to achieve national goals.

Taxes in many developing countries are made the country's backbone not only to pay taxes but to improve economic facilities and infrastructure development so that GDP also rises. Most importantly for a country's economic cycle, the government must be serious in improving the investment climate, so that investment and economic competition and export power increase. As a result, investment ease scores are getting better and a country is the most attractive investment location in the world.

There are more extreme ways, especially for poor countries or developing countries to pay debts, namely through the mapping of sovereign wealth funds. SWF is a financial vehicle owned by a State that owns or regulates public funds and invests them in broad and diverse assets. Simply put, SWF is state savings. It is hoped that with this SWF there will be no idle and unused state revenue. The revenue can be invested appropriately and with the quality so that a large return can be obtained. There are 2 types of SWF fund sources, the first comes from the results of non-renewable resources (oil and gas) and the second comes from funds in the form of financial assets such as stocks, bonds, property, precious metals, and financial instruments.

right, basically printing excess money is not good for the country's economy. especially with the existence of a global currency that can be used throughout the world, of course it will reduce the demand for the USD, especially the one that began to legalize it is in developed countries, of course it has a big impact

You should be more specific about what kind of debt it is? Is it foreign debt or domestic debt?
For foreign debt, you should know that the currency exchange rate is affected by the increase/decrease of the local currency supply. So a country could print more (domestic) money, but it would trash its exchange rate, it's the same.

For domestic debt, the government could repay its bond with newly printed money. However, in the end, it will only reduce the country's wealth because of hyperinflation. So no point in doing that. A good government is not likely to scam its own people.

No, barter is a means of trade, not related to debt and repayment.
Maybe if the debt is pegged to gold (or something stable), then you have a case.

Printing money is a good idea only if your currency is a reserve currency. Otherwise like the others said, you will end up like Venezuela.

How do you think USA get away with it? It is because no matter how much they print, there is still demand. (Or was)

The danger is, now countries like Russia, China, Iran and even some European countries want to use something else. (Euro or gold backed crypto) When this happens, USD will lose its demand.