Printing money dilutes it’s value. More money chasing the same quantity of goods and service drive up their prices.
Yes, that too. In fact that’s probably more important at this point.
$4 trillion in ‘quantitative easing’ started the ball rolling.
Quantitative easing was (literally) printing money out of thin air.
I love it! Short and to the point, Thank you.....
“Printing money dilutes it’s value. More money chasing the same quantity of goods and service drive up their prices.”
Let’s say I own a bakery. So, i manufacture and sell loaves of bread every day. Let’s say I price them at 5 dollars a loaf.
Then one day the government decides to print up and give away 1 million dollars in cash to each and every citizen in the country. Now, all my customers, regular or not, when they come into my store, they’re all millionaires (including myself).
They each now have more than enough money to buy out my entire inventory for the day if they please.
Ok, but then why do I, or why should i have to, raise the price of loaves of the bread i baked to anything more than the 5 dollars a loaf I was charging just a day or two before? Why not just sell them at the old price of 5 dollars a loaf?