Saket Jindal

In my childhood, it happened many times

when I used to wonder what stops the government from printing money? Can’t a country just print money and make its citizens rich?

 We used to hear that Mr. A is earning more money than Mr. B. So Mr. A is richer than Mr. B. Rich and poor is decided on the basis of money one possesses. How it would be if the government distributes money to everyone so that everyone lives a comfortable life!!

A lot of people have this misconception that a country’s currency is backed by the gold reserves it holds. But, this is simply not true – any country can print as much money as they want, and they don’t need to have any gold reserves to back their currency.

But, that measure is only for extreme situations and is also considered dangerous because printing money causes inflation in an economy, and if you print too much money you can get hyperinflation also.

So how Money causes Inflation?

When you will have enough of money to live a comfortable life then money value of value will fall for you and will not be carrying about your expenses which give the seller a chance to earn more by charging higher prices and when prices are high in economy their exist inflation. Which is not good at all.

So to keep the economy in control and ensure there exist no Inflation or Deflation or Recession, RBI DON'T print enough money to make everyone RICH.