Why Can't / Should Countries print large amount of their currency?

[Arbie]

The value of a country's wealth is established by its productive power -- how many goods or services it creates in any given time (this is true even for a gold-based currency). By contrast, the value of the currency depends upon how much there is and how often it turns over (sometimes, but falsely, called the "velocity" of the money). The wealth of the country is distributed into the monetary unit -- if you had one ten-dollar gold piece in the entire country, then the value of what the country produced would be measured in so many atoms of gold for each good, service, &c.. More gold (or more paper-dollar units), and the value of the individual units goes down (there are more of them to divide into the productive capacity).

So, printing money does not accomplish any social benefit, because the only way to actually increase ones wealth is to increase ones production. You have to make more things, not print more notes, to create additional value.

There is the additional problem re who gets the new money first. If I start printing $100 notes in my basement, the actual crime is that I am defrauding my neighbor by paying for goods and services with "counterfeit" notes before the market can depreciate them. But, the people who get the new notes last (after the market has made the correction) are cheated in terms of their buying power. They may have more money, but each money unit is worth less, so everything costs more.

This is the Achilles heel of all paper-money scams, whether run by me from my basement or the Fed from Washington, D.C. Paper-money scams inherently are fraudulent and dishonest -- a way for me to increase my buying power at your expense. When I do this, it's a crime; when the Fed does it, it should be. Yes, the government refuses to do anything about it, but what does that mean other than that that the government and all its prosecuting authorities are all liars, cheats, and thugs.

You cannot prove a case beyond reasonable doubt if you don't come to court with clean hands. Printing wads of paper money coats your hands with green and filthy ink. So, in the long run, you lose.