Money Printing Explained
Today in our series about economic factors, let’s talk about something in relation to inflation.
The case would be of how money printing causes inflation in the entire system. Of course this would have many ideas and thoughts from all of you.
Supply of money. “Printing money” -- printing more physical currency -- is certainly one way for the government to increase the money supply. But currency is only part of the money supply, and in developed countries, is generally small share of the total money supply. The rest consists of deposits in private banks. Those are affected by government policies, but only imperfectly. Large, ongoing increases in the money supply are generally traceable back to government policies, but on a day-to-day basis, the decisions of banks on whether to make more or fewer loans play an important role as well.
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