> RoMunn wrote: > I am not enough of a student of economics to do more than speculate, and > even that would be an uneducated guess. > > Anyone? >
Me neither, but as you know that never stops me. Ha! In short, when you print money you cause inflation. In normal times, lots more money causes hyperinflation to the point where the currency becomes meaningless (or worthless). In a deflationary time, like now, you can use the inflationary effect of more money to stop deflation. Take your average supply & demand. If people stop buying stuff, like now, there's lots of supply and little demand. What happens? Prices fall. But if people still don't buy (because they're tapped out) you get a bad deflationary cycle where people wait to buy because it'll be cheaper tomorrow. Like with houses. What's that do to your house price? It drops. In other words there's no money in the market. So the government prints money and dumps it into the market. Most people that get this "found money", spend it because it's ... found-money! So demand picks up, supply drops and things even out. Keep dumping in money, though, and prices soar because people want to exchange their money for something else, like stuff, since they'll find even more money tomorrow. So it's like a balloon with hole in it - printing money puts enough air back in the balloon to keep it full, but put in too much and the balloon explodes. Or I could be totally wrong. Seriously. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:286430 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
