Why won't they just produce more money?

While our currency isn't backed up by gold any more, if you flood the market with paper money, it loses its worth. What you would see is like one of the African countries they've been talking about on the BBC news lately. It's called inflation and the more currency is pumped into the economy, the more everything costs so that eventually, if we did that, a loaf of bread would cost fifty bucks and a gallon of milk might costs $25.

The problem is, so much credit has been extended to people and institutions that have no way to pay it back that the entire world can no longer find the credit to support business as usual. Life is going to be rough for a while.

You can't just make "more" money, otherwise it's value will be decreased. And if one country just made millions of cash notes and coins, it would be worth nothing. So that is definitely not the cure for the global economic crisis. When a crisis like this occurs and money becomes worth less than usual, the best thing for you to have is assets because they could potentially become worth more then money.

Its called inflation, it's happening in South Africa right now, they have to bring wheel barrow fulls of money just to buy their groceries. When a country makes more money than it has, its currency becomes worth less (meaning they would have to pay something like 1 million dollars of their currency for a loaf of bread.)

If we make more money, the cost of things goes up, so you need more money, so the cost goes up again, until you end up like some African countries who have done just that, and take a delivery van full of money (exaggerating its more like a suitcase) to buy a loaf of bread. The number keeps going up, but it is still the same value that is changing hands. The money doesn't just disappear, it's just that a lot of it is sort of theoretical- its money that is owed, but no-one actually has it. Sort of.

Thats why we are in the Shizz we in now, cause they have printed more money than we can back with gold. I hate to say it but this country is going down the tubes. I work at a liquor store and now people arent even buying liquor to drown thier sorrows. Its a sad day in America when the drunks cut back.

Turkey used to do that. they had HUGE inflation for years. 4 years ago, they cut 6 zeros off the money...

i was told the the paper money is backed by gold. meaning that if the country has $1million in gold we can only circulate $1 million in paper. or something like that.

Because then the value of the dollar diminishes.

That just creates inflation and that isn't good for the economy.

http://en.wikipedia.org/wiki/Inflation

In doing so,theres no challenge,people will no longer work hard if they depend.