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Message: <blockquote data-quote="Coldwyn" data-source="post: 5448283" data-attributes="member: 10041">[MENTION=177]Umbran[/MENTION]:Add to this the global exchange rates and the import/export dilemma.Very simplyfied version: a country is more or less a closed systems when it comes down to money. No matter the distribution, the amount of money in circulation more or less stays the same. Therefore: Trade and investment with/in other countries.Trade: The ideal case would be that I (exporter, low exchange rate) sell stuff to you (importer, high exchange rate), thereby adding to the money in circulation in my country.Investment: Bonds and loans are akin. I give you a loan, I want interest, even if it´s just 1% PA. As long as I´m getting my interest paid, why would I have my loan back? You´re my cash-cow to milk as I please.Mixed form: I could also export something and don´t take direct money for it, rather I issue a loan alongside the exported product and try to add further revue or counteract my own loans with you. Whatcha think arms deals are for?The Import/Export Dilemma: There´re two dimlemmas here, actually. On one side, if I import more than I export, my dept increases. On the other hand, if I export stuff from a high exchange rate country to a low exchange rate country, I could as well as burns the money outright if I don´t offer more loans right along with it.The issue of simply printing more money: Fun Facts First - anyone remember what "bill" and "note" used to stand for? Each bank note/dollar bill issued used to be a promise "Exchange me for gold or silver" und used to be backed-up by reserves of just that. Fort Knox, anyone? So if I as a foreigner traded you, as a citizen something, I should be able to ask the US to make true of that promise, especially as I really can´t do anything with a bunch of dollars back home, right? Nope. The circulation of bank notes by far exeeds its backing, so it is enterily impossible for the US to fullfill its side of the promise. They either offer me some other promise (aka loan/bond) with the incentive of added interestes or trade me some of their share of interests in my or another friendly country.This leads back to the topic: Who, in his right mind, would actually try to aquire a pill of unfullfillable promises with no chance to ever make money from it?</blockquote>

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