Recession...

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Recession...

Postby Weasley » Wed Jan 28, 2009 11:44 am

Okay...
Me and my friend were talking about this last night and wondered, if the country has no money, why don't they just print some more? There is probably a logical explaination for this but we just don't know what it is!
Somebody please explain...
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Re: Recession...

Postby rufio89 » Wed Jan 28, 2009 12:35 pm

It's a lot more complex than this, but this is the jist of it...

If more money is made, then the money thats left over has less value - think of it like if the market gets flooded with lets say cameras. All the camera companies will be forced to lower their costs so a camera that was worth £100 will only be worth £50.

Did you ever hear those stories of post-war germany, where people were pushing around wheelbarrows of money to buy a loaf of bread and by the time they got to the shop, it cost twice as much.

Thats basically what would happen
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Re: Recession...

Postby Weasley » Wed Jan 28, 2009 12:43 pm

Hmmm I guess, but wouldn't it just be so much easier to print off some more money and give it to the banks to get the financial climate going? I work in the car industry and am glad they have just got £2bn, but it just makes me wonder where that money has come from and why they just can't print say another billion and give it to the banks?????

Stupid, stupid credit crunch...the media is making it worse! If nobody read the papers or watched the news I'm sure people would just be spending as they have done. Stupid, stupid media...
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Re: Recession...

Postby rufio89 » Wed Jan 28, 2009 12:52 pm

yeah, i mean to be honest, I'm not really feeling the credit crunch. Obviously work and stuff is less precarious, but now I'm in my new job, it's not really affecting me, especially as I'm earning considerably more now than I was before (50% more infact :D)

But yes, it would be very bad for the economy to just print more money. And money is like a cheque. If you look at a note, it's actually a cheque from the bank saying "we promise to pay the bearer (£5,£10 etc). So they cant really just 'make more money', because they just dont have the resources.

Plus if there was just more money, then EVERYONE would have more money, and it would therefore make no differnece. Things would just be more expensive.
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Re: Recession...

Postby snail » Wed Jan 28, 2009 7:17 pm

Ruth's right: the pieces of paper and bits of metal in your purse are just symbols, not real wealth. Making more of them wouldn't do anything for the economy. There would still be the same amount of resources, just more money to buy them with, so prices would just go up to accommodate the extra money.

There have been historical situations where governments have tried to increase the supply of money when the economy was in trouble, and exactly that has happened - rapid inflation. Argentina springs to mind, but there are probably others as well.
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Re: Recession...

Postby dipsydoodlenoodle » Thu Jan 29, 2009 11:31 am

I did read somewhere that Gordon Brown had considered printing more money as an option. Apparently Japan did it a while ago and it worked really well...
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Re: Recession...

Postby kerrie24 » Thu Jan 29, 2009 3:11 pm

yeah i heard that they were gonna print more, i was like"if they can do that why are there so many poor people?" maybe im just naive!lol hope if they print some they pass a bit my way! :D
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Re: Recession...

Postby Weasley » Thu Mar 05, 2009 10:06 am

Reading the news this morning and saw this...

http://money.aol.co.uk/bank-to-cut-rates-and-print/article/20090305022309990001

Gordan Brown must have heard my hairbrain idea and thought "desperate times call for desperate measures!". Maybe I should run for PM?...hey, it could happen! =D>
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