Quote:
Originally Posted by PR_Phil
They can't just print the money.
In the past few years they have printed too much money, as much as they could, for bailouts and military spending. While they didn't actually "print" cash, they sold securities worth trillions of dollars which has a similar effect as printing money because it adds to the available funds in the pool without having increased the actual worth of the nation. When you add to the pool without increasing actual worth, you devalue your currency as it is a product of your worth.
so, if the federal reserve / mint decides to just print a trillion dollars, they devalue each and every dollar in existence and while they can immediately use the money they printed, they have not increased the overall worth of all the money there is.
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This is always what economists say about printing money, that it will devalue the dollar, hence inflation. BUT why would that have to be if the US printed 500 billion dollars to pay off China and China took the 500 billion and went on a worldwide shopping spree buying up resources, as they already do? What if for example China took that money and in just one transaction paid Canada for the rights to the Arctic?