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expatriate's picture
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Location: Arizona
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Printing Money is Good?

Did you ever refuse to hunt with somebody because he was crazy and you just knew it was a matter of time before he got somebody killed?

This just in from KOS: printing huge amounts of money is good because it "prevents deflation," and devaluing the dollar provides growth because a worthless dollar makes our goods cheaper overseas. The only problem with that is that people who have lost their purchasing power no longer make purchases, and sales dry up. This extends to our ability to buy international commodities (like oil and precious metals, for example), as our worthless dollars can no longer buy the materials we need to survive.

If we believe this author, Zimbabwe's runaway inflation and worthless currency make it the most prosperous country in the world.

It's absolutely amazing how ridiculous these people can get in desperate attempts to convince themselves that economic failure equals success. You'll probably be seeing this guy nominated for a Treasury post soon:

http://www.dailykos.com/story/2009/3/21/711263/-Why-Printing-Money-Is-Good

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Location: Florida,USA
Joined: 08/21/2003
Posts: 1566
Printing Money is Good?

Wow !! there are some really great minds out there.

If it takes $2.00 to buy 1 yen then that new TV from Japan the cost $300.00 back when $1.00 would buy 1 yen will now cost you $600.00.

Everything based on the dollar will now cost you more except your salary, which will cease to rise because it'll also cost more to run your business on top of the higher taxes heading down the pipe.

They have to make failure=success because the people they count on to keep them in office are failures, for the most part, and you don't want to alienate them by telling them they are , in fact, failures and failure is bad.

I particularly like this quote from the comments area after the story,
"Money is an abstract concept anyway"

Kinda shows the mindset of alot of folks out there.

I'll have to check my facts but I believe that it was Richard Nixion that abandoned the Gold Standard.

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Location: California
Joined: 09/06/2008
Posts: 1071
Printing Money is Good?

If you think just printing money is good. Look south of the border at the Peso sometime and see what it will do for your economy.

expatriate's picture
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Location: Arizona
Joined: 10/26/2002
Posts: 3207
Printing Money is Good?

Great point about Mexico -- another shining example about how a worthless currency turns a nation into an economic juggernaut.

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Joined: 07/29/2008
Posts: 723
Printing Money is Good?

You realize of course the post isn't by Kos himself but by some poster called "sparks". And the post wasn't good enough to get recced up. There are many much better posts on Kos written by people with many different veiwpoints.

But on to printing money. My cash became worth 6% less overnight. All of my savings is in cash, so I don't like printing money very much either. Many people have always assumed that this was the method Bush was going to use to pay down the deficit, dilute it. If only we just had the Bush deficit.

All of our debt is dollar denominated, if you inflate you can cut your debt in half, or more. You inflate your way out. All the import export arguements run in our favor.

The reason for printing the money was to add over a trillion into the sytstem to push lending a little. More money around is more money to lend. But printing money can have dire consequences, like hyper inflation.

expatriate's picture
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Location: Arizona
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Posts: 3207
Printing Money is Good?

You don't get yourself out of debt by borrowing vast sums of money. As for the Bush deficit, I agree -- it certainly seems quaint by comparison.

And I didn't say the article was by KOS -- I said it was from KOS. You may want to split hairs on this point, but it references a left-wing opinion.

And the inflationary argument may work in our favor in terms of exports, but not imports. A worthless dollar may make it easier for other nations to buy our goods, but it make it a lot tougher for us to purchase theirs. For someone who claims to travel internationally a lot, I'd think you'd understand the concept of exchange rates.

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Location: Florida,USA
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Printing Money is Good?

If you devalue the Dollar then every debt that was incurred at the formerly higher valued Dollar will be effectively increased proportionately, sans interest, which will make the debt higher in the long run.

I canot agree more with Bunny. Looking south does show he result of printing yourself worthless.

civetcat should feel lucky, my wife lost 40% of her 401-K in 3 weeks.
I moved mine into a money market account which saved me but will hurt in the long haul.

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Printing Money is Good?

For the record I don't like devaluing the dollar.

But it does do some good things. Who cares that imports shrink, good for balance of payments. I don't buy TVs. We drink too much oil anyway.

Our loans are valued in dollars. Not before or after devaluation. If the value of the dollar gets cut in half I pay off my mortgage at the old emount with the new earnings. Same with our debt. Being the international reserve currency has benefits.

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Location: California
Joined: 09/06/2008
Posts: 1071
Printing Money is Good?

I agree Civet it can do some short term good. However (and this is a big however) unless you have mastered the art of alchemy you cannot make more gold to go along with the paper. Bottom line is that that's what cash is. A representation of gold. The more you print, without having the gold to go with it, the less the paper is worth. Long term effects of printing cash are very detrimental to an economy.

expatriate's picture
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Location: Arizona
Joined: 10/26/2002
Posts: 3207
Printing Money is Good?

OK, let me get this straight -- you say you don't support devaluing the dollar, and then you spend the rest of your post defending it.

Shrinking imports good for balance of payments? Yeah, we get paid -- in worthless dollars.

You don't buy TVs -- so you don't think anybody else needs them, either.

You're OK if the price of oil goes through the roof -- affecting not only cars, but the cost of energy production, transportation, home heating oil, lubricants, plastics, etc.

You're assuming that your wages will keep pace with inflation. Yes, your mortgage will remain the same -- but the price of everything else in your life will increase tremendously.

I remember days of high inflation (as in Jimmy Carter) all too well -- you can't tell me it is beneficial.

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