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Nickelless
Administrator
USA
5580 Posts |
 Posted - 12/09/2008 : 04:37:34
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I can't say I disagree with what this guy is saying, especially the second half of the article (the first half has graphs, which is why I'm not copying and pasting it):
[quote]A popular view is that an increase in the money supply would be beneficial. If so, then counterfeiting should be encouraged. If the economy would benefit from printing more money then expert counterfeiters (those able to produce currency notes that are indistinguishable from the 'real thing') would be performing a valuable service.
But doesn't counterfeiting cause an undeserved transfer of wealth from most people to the people who print the money? The answer is yes, but that's no different to what happens when the central bank creates money out of nothing.
And doesn't counterfeiting, if done on a large scale, distort price signals and thus bring about a reduction in real savings? The answer is yes, but again that's no different to what happens when the central bank creates money out of nothing.
The point we are trying to make is that counterfeiting is unhelpful, regardless of whether it is done legally by the banking system or illegally by unregulated/unofficial operators. People often forget that money is not wealth and that adding more money to the economy does not add more real savings.
The problem is not now, and never will be, a shortage of money. One of today's problems in the US, Australia, and several other Western nations is a shortage of savings, and not only will increasing the money supply not help the situation it will very likely make the situation worse because it will lead to a further reduction in real savings.
Increasing the money supply by creating new money 'out of thin air' is always a bad idea, but it is currently a popular idea and is likely to remain so. That's one reason why recession-like economic conditions are likely to prevail for many years to come.[/quot]
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 12/09/2008 : 21:45:36
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Makes me think of Mel Brookes, in The History of The World, when he says "It's good to be King".
If only I could print money at will, that would be good.... |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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Comparison between inflation and counterfeiting
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