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

[Akshay]

why should India or for that matter any other country not print a large amount of their own currency?
Who keeps records or controls the amount of money in a Country or the amount of money printed in a country??
Who has a watch over money of all the countries to stop them from Printing it on their will???

[Harry]

ask ecuador! the currency is not backed by a real value. this kills the economy of the country. while it has buying power in country, compared to the rest of the world it wouldnt buy a glass of water at a buffet

[Good As Gold]

Inflation.

http://www.learnliberty.org/videos/why-n...more-money

http://www.youtube.com/watch?v=DB_uHq1_8FA

[Tejas]

simple:

every country must have 90% equivalent gold for every unit amount of currency they print in its respective reserve bank which they MUST to prove to the world government (UNO)
i.e. in India, they need to have 90 paise worth gold in RBI to print 1 rupee

since they don't have enough gold, they print or mint high amounts 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.

[Anjaree]

They don't know how to distribute that money to their people. They can use it to pay back the debts, like in former Germany or Zimbabwe, but the creditors have declined.But if they could, they might figure out that they have to print more on the next day,due to hyper inflation.

[jonny]

They money supply if a very important topic in economics. I would avoid listening to Keynesian Economist when it comes to this. They seem to have misguided principles.

[Ravin]

Simply printing out large amount of currency will lead to inflation because the money supply in the economy will shoot up. It leads to a situation where "too much money chases too few goods". It will lead to utter chaos and the economy will crumble.

In order to keep in control this situation, every country's central bank regulates the money to be printed. They also regulate the money supply in the economy. The third answer (Tejas) has the details of how printing is regulated.

No one has a watch over printing at their own will as it will not happen. But there are BASEL norms. These are just banking laws and regulations. You may Google Basel norms as it is a very wide topic