Who can explain why my logic is faulty?

Questioner you are confused about money. Ultimately it is not money that matters ... money is just an allocation tool. What matters in terms of wealth and poverty is the actual production of the economy. Productivity. If a nation is poor, that means its economy does not produce enough stuff to go around.

Rich or poor, resources are ALWAYS constrained and limited by physical reality: if a person spends an hour making one thing, they cannot be doing something else with that bit of their time, and time is limited. Nothing about the use of this tool "money" can change that.. The only cure for poverty is to produce more stuff. You can print an infinite amount of money, but if you don't increase the real productivity of the economy, all that money just translates into hyperinflated prices, and no one is any better off.

I recommend you just ignore money, let it become invisible, and spend some time pondering what en economy fundamentally does. Look down on an economy in motion and ignore the money changing hands. People work, produce goods and services, and those are allocated among consumers. If there is poverty, that means not enough is being produced and allocated. Why is that? What would it look like if everyone produce more? Why don't they? Rethink all this from the beginning in terms of real fundamentals, real activities and real resources, and ignore money.

Money is nothing more than a token of the countries wealth. Imagine a country has a stack of gold bullion. It cant give all its countrymen a slice of bullion so they are given tokens instead. The more money that is printed the less valuable each note becomes.

If only one note was printed, that 1 note would be worth the whole value of the bullion, but a million notes are all worth 1/1,000,000 each.

Its not exactly what i have said but that is the best way i can explain it.

Since the gold standard, nobody limits the state's ability to create as much money as it wants to. History gives us many examples of nations that followed that precise course. They all ended in disaster because eventually people stopped accepting the currency. You cannot stop a country from creating more money, but you cannot compel anyone to accept it either.

I understand what you are trying to put across, but countries can't do that because then there will be too much money in circulation, and then the currencies would be worth too much (for example for this situation, the pound ends up being worth three times as much) and then everything would be blown out of proportion.

Money is not just the pieces of paper you carry around in your wallet, It is anything you can use to buy stuff. Money is really credit and the stuff in your Wallet is an IOU from the government, that is a federal reserve note, which they will take as payment for the money you owe them. people will exchange stuff for them because now the government owes them the money instead of you. When you deposit your paycheck in a bank they owe you money and when you write a check, their debt to you is transferred to as debt to the payee of you check. If you charge something on your credit card your debt to the store is transferred to the credit card Company who then send you a bill saying you own them money which you pay with a check. That is, what the economy runs on is IOU's to each other.