Increase in money supply cannot make any country rich. It makes a country go back to poorest of poor stages. Reason is simple. Increase in money supply into people has no backing from the supply side. Suppose you give money to people for free, what they would do with that money ? Definitely everyone wants to spend that money to buy something. Demand for all commodities increases. But where is the supply ? Has the Production increased ? When resources are constraint like production capacity, labour force, raw materials and capital , and demand increases, ultimately it leads to increase in price of commodities. This is called Inflation. Inflation reduces the real purchasing power of the money. It leads to fall in rupee prices , it can impact the working class more because of inflation. Overall economy will completely slow down. This is for the same reason i feel the black money even if brought back to India will have no real use. It could only increase inflation rates and spoil our economy.
Posted 2 years, 4 months ago by Rakesh Bharadwaj
Free stuffs are bad for individuals and bad for country. To see a sustainable growth, slow but strong plans work.
Printing excess money will not only devaluate INR in international market but will also damage the economical image of country.
Excess printing would increase the chances of deflation, Zimbawe suffered this. They were using currency notes as toilet papers.
Money without value is a piece of paper. To maintain its value, supply should not be more than demand. Not only printing more money, but even distributing the money will have same impact.
Posted 2 years, 4 months ago by Prakash mehta
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