how rbi prints money
Currencies come and go, but gold has been a store of value for more than 5,000 years. Gold is rare, but, thanks to Gutenberg, paper money is not. ... According to former Fed chairman Alan Greenspan: "There is no inherent anchor in a fiat-money regime [a currency not underpinned by gold]. If the RBI prints new currency then the supply of currency will increase in the country which will further increase the inflation in the country. Suppose if the moneysupply increased to 50% then the price of general prices like bread, butter, clothing, house etc. will also increase proportionately 50%. The Reserve bank decides the volume of currency to be printed. The demand for notes is estimated on the basis of growth rate of economy. Earlier gold standards is followed by the nations till 20th century. According to this currency printed should be replaced by equal amount of gold. Printing money will generate demand, kickstart projects, help businesses and employees and workers. And given the steep economic dip, risks of overheating are trivial. GoI and RBI must opt for printing money. Procedural caution may kill the India story. This happened recently in Zimbabwe, in Africa, and in Venezuela, in South America, when these countries printed more money to try to make their economies grow. As the printing presses sped up, prices rose faster, until these countries started to suffer from something called “hyperinflation”. The Fed tries to influence the supply of money in the economy to promote noninflationary growth. Unless there is an increase in economic activity commensurate with the amount of money that is created, printing money to pay off the debt would make inflation worse
Which Country Has the Most Gold Reserves?
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