We know poverty is a serious problem in so many countries all around the world. We are not saying that there are countries were there are no poor people, but based on data, there are some countries were there are extremely poor people and the majority of them cannot afford three square meal or they live under $1. This is no lie because I can tell you first hand, and so a lot of people want to break out of this poverty and they go online, watch video, and read books to find a solution.
If you have checked the internet this year you must have seen a lot of advice on how to get out of poverty this new year but I can tell you that a lot of them are going to be telling you things that cannot make you more money if you were not rich before. With that said, let me wish everyone a happy new year, as this is my first post this year.
Since we know that poverty is a problem, we do we not just print more money? This is a very thoughtful question, and we could say it is quite fascinating since if we all print more money and get the money, we can all be rich and there will be no poor person. As intriguing as the thought might sound, it is not going to be possible and it isn't as easy as we see it because the government cannot just print more money for all us to have.
First concern will be inflation, where there is more money and same product leading to increase in price of goods and services. Since we deal on the law of supply and demand in our economy, we know that when demand is high and supply is low, it leads to shortage which then causes the price of the good or service to increase but when there is an increase in the supply of a product compared to demand, the price of the product drops. When inflation gets extreme, it is known as hyperinflation and this will often happen when more money is printed without the supply of good and services in a country and this leads to increased price of goods and decreased value of money.
This is why printing money isn't a good idea. As ridiculous as the idea sounds to you now, there are some countries that have done this in the past like the Weimar Republic of 1920 which was established as the new Germany after the German empire lost the 1st world war. Since Weimar republic was destroyed by the war and things were in the ruins, also, there was a $132 billion reparation on the country based on the Treaty of Versailles, coupled with unemployment, and hunger, so there was a reason to print more money. They printed a lot of money that by November of 1923, prices of good were doubling every few hours and people had to use wheelbarrows to buy necessities like bread.
Other countries like Hungary in 1946, Yugoslavia in 1994, Zimbabwe in 2007, and Venezuela in 2016 also experienced hyper inflation as a result of printing excess money. Their currency became worthless even when they all have valuable resources. While printing more money can look like an easy fix to problems economically, it isn't a solution rather it is a problem as it would cause more harm than good. Production should be key when money printing is the play because lack of production would mean hyperinflation.
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