Who decides how much money to print

[steveo]

A bloke in the office said "who decides how much money to print". Presumably something to do with the Bank of England. If every country agreed to print the equivalent of an extra £10,000 per person they had living there, they could give everyone the ten grand and everyone would be wealthy.
Or wouldnt this work?

 

[class]

No because more disposable income will cause demand to increase, with supply remaining the same and therefore prices will increase to reduce demand.

 

[steveo]

good answer

 

[TrueBlue]

A bloke in the office said "who decides how much money to print". Presumably something to do with the Bank of England. If every country agreed to print the equivalent of an extra £10,000 per person they had living there, they could give everyone the ten grand and everyone would be wealthy.
Or wouldnt this work?

Currency would become worthless you would have a situation like in Germany after the war their currency was worth nothing so you had kids playing on the street with wads and wads of deutschmarks

 

[DTS]

Currency would become worthless you would have a situation like in Germany after the war their currency was worth nothing so you had kids playing on the street with wads and wads of deutschmarks

The currency became so worthless that it was cheaper to like a cigarette with a note than it was to buy a box of matches.....

 

[MK Shrimper]

Bit like Zimbabwe at the moment - I saw a news report where a bloke bought one cigarette and paid with a HUGE bundle of notes.

 

[Hazey]

In fact, a man told of how he went into a shop for a cup of coffee, which was priced at roughly 3000 marks, an hour later he asked for the bill and he was charged around 8000 marks, such was the speed of hyperinflation then.

 

[chadded]

If every country agreed to print the equivalent of an extra £10,000 per person they had living there, they could give everyone the ten grand and everyone would be wealthy.
Or wouldnt this work?

AS said, this would make £10,000 worthless. Would you want 10 grand if everyone else had it- it wouldnt actually make you richer at all.

Isnt the money thing to do with gold reserves, or am I talking balony?

 

[Pubey]

Currency would become worthless you would have a situation like in Germany after the war their currency was worth nothing so you had kids playing on the street with wads and wads of deutschmarks

people still uncover walls where deutschmark notes have been used as wallpaper!

 

[BrettieAngell]

Bit like Zimbabwe at the moment - I saw a news report where a bloke bought one cigarette and paid with a HUGE bundle of notes.

isn't inflation is about 100,000%?

 

[MK Shrimper]

isn't inflation is about 100,000%?

No idea, I know it's huge.

 

[BrettieAngell]

No idea, I know it's huge.

Well I'm pretty sure that was the last figure I heard.

Someone should just shoot Mugabe.

 

[Pubey]

In fact, a man told of how he went into a shop for a cup of coffee, which was priced at roughly 3000 marks, an hour later he asked for the bill and he was charged around 8000 marks, such was the speed of hyperinflation then.

bet he wish he brought an espresso!

(i'll get my coat!)

 

[Napster]

Money supply is more than gold, or notes. It's even contentious as to how its measured. Generally, there's 4 different levels, according to liquidity.

Giving everyone £10k would not actually make too much difference, as inflation would only occur if money demand was stable as well. So, the bank could increase interest rates to control this if it got out of hand.

 

[Pubey]

Money supply is more than gold, or notes. It's even contentious as to how its measured. Generally, there's 4 different levels, according to liquidity.

Giving everyone £10k would not actually make too much difference, as inflation would only occur if money demand was stable as well. So, the bank could increase interest rates to control this if it got out of hand.

yeah the four levels (M0, M1, M2 and M3) range from narrow money which is just currency... up to broad money which includes long term deposits and liquid assets

 

[TrueBlue]

yeah the four levels (M0, M1, M2 and M3) range from narrow money which is just currency... up to broad money which includes long term deposits and liquid assets

Is money value based on faith???

 

[BaileytheQuitter]

Talking about Zimbabwe (sp), when I was there on holiday about 6 years ago (all before the whole farmer fiasco) 100 dollars was equal to 50 pence!

I went up to the barman in the hotel and gave him 100 dollars telling im he could buy himself a drink (about 20, 10 pence, dollars for a cocktail). As his English was very poor he thought it was a tip, he took the whole 100 dollars.

Next day we found out that the fellas monthly pay was only 90 dollas, about 45p, for a whole months work as a barman.

Another memory was when my dad went to the cash machine which allowed you to select money in £ which was given in ZD's. He took £20 out and the wad was literally like a bible's depth.

Ridiculous.

 

[sufcintheprem]

If this isn't something they've already done, it sounds distinctly like something the Chinese government would give a go.

 

[BlueJ]

If this isn't something they've already done, it sounds distinctly like something the Chinese government would give a go.

Some governments do indeed print a little bit of extra money from time to time as a very short term financial fix!

 

[Hotman]

this £10k per person would have made maher better value,