I´m taking a free class with you in here. These "banana republics" through the printing money method are creating just paper, right, cause the circulation of those currencies are only local, or sometimes are dependants of another like USD
Well most have digital but yes it is a throwback to the days when paper was just printed. The Fed always controlled bank notes (still does) so that is central bank money. We do not use paper money much anymore which reduces their impact.
The "digital" dollar is from the commercial banks. Those that are ban repub do not have that line between central and commercial. Hence they just create the money out of thin air.
They tend not to be dependent upon the USD but get crushed by it. When the USD rises, the local currency falls. This means imports, priced in USD, get more expensive. It also takes more of the loc curr to pay back USD debts.
Ignore what people about money, they are clueless.
China operates under the same system as the US, fractional reserve banking. That means commercial banks expand the supply of Yuan through loans.
So every country does the same
About 80% operate under fractional reserve banking. Some smaller countries do not.
Euro, USD, JPY, GBP, Yuan..all under the same system.
Interesting to study those smaller countries do not
They tend to have the banana republic feel and they are the ones who create hyperinflation because their central bank can print money.
When money is created through loans, hard to expand the money supply without economic output.
I´m taking a free class with you in here. These "banana republics" through the printing money method are creating just paper, right, cause the circulation of those currencies are only local, or sometimes are dependants of another like USD
Well most have digital but yes it is a throwback to the days when paper was just printed. The Fed always controlled bank notes (still does) so that is central bank money. We do not use paper money much anymore which reduces their impact.
The "digital" dollar is from the commercial banks. Those that are ban repub do not have that line between central and commercial. Hence they just create the money out of thin air.
They tend not to be dependent upon the USD but get crushed by it. When the USD rises, the local currency falls. This means imports, priced in USD, get more expensive. It also takes more of the loc curr to pay back USD debts.
The PBOC can do the same as the Fed in creating reserves but those are not broad economy money.
Now a case could be made about the PBOC doing the will of the CCP. That I can believe since the line is almost non existent with Xi.
yeah it´s highly possible that they follow the CCP will
I dont see anyone saying "no" to Xi. It is not beneficial for one's life expectancy.
hahah sad but true.
I think Jack Ma found out what happens when you get too big for your britches.