Lifestyle Desk: Money! Without which life is stagnant. People all over the world are running after money. What falls short despite being many. And many people do not end their grief for this money. The question is why money is printed so little? If you print more, there is no problem! A Spanish TV series called “La Casa de Papel” created quite a stir. It can be seen that a group of robbers entered a Federal Reserve Bank and took some people hostage and looted money.
money
However, their method of looting is slightly different. They are not robbing the bank's money, but using the bank's money printing machine to create billions of dollars. After seeing this, many people have come up with the question that if the government itself prints billions of rupees and hands them over to us, then all the financial problems will be solved!
Or, if the government prints bags of money and builds Padma Bridge, Meghna Bridge, Buriganga Bridge, then where is the problem? Many problems! If there was such a simple solution to such a big problem, there would be no more worries.
Let's find out where the problem lies. Specifically, the central bank is responsible for printing money. So, on what basis does he make money? Can he print as much money as he wants? There is no mandatory rule to generate money. The government of any country has the freedom to print as much money as it wants. But no country prints money as much as it wants, money is printed in balance with the economic needs of that country.
The amount of money production is related to the income of the people of the country, economic needs, wealth of the country etc. If you produce more than this, the problem starts, the country's economy starts to lose balance. Suppose a country has ten mangoes as wealth. And that country prints 20 rupees a year. Apart from the complexities of transportation cost, retail price, wholesale price, etc., the price of each mango is not 2 rupees.
Then the country's total wealth and total currency are balanced. The next year the country printed a total of 40 rupees, but the total wealth remained ten mangoes. Since there is no new resource in the country, the allocation for buying those 10 mangoes is Rs. 40, ie the price of each mango has doubled. In this way, if money is produced in excess of the total wealth of the country, the price of goods increases, the price or purchasing power of money decreases. This is called inflation.
What is the profit of printing more money if the price of goods increases? Therefore, the central bank of a country has to research and determine the demand and print money accordingly. Usually 2-3 percent of a country's GDP is printed, but in developing countries this rate is a little higher. That's why we can't create money at will and build the Padma Bridge overnight.
Then that extra money will enter the mainstream economy through the hands of workers, engineers, dealers, suppliers and many others and play it safe. Due to inflation, excess money is not only wasted, but due to this, the balance of the country's economy is greatly affected. Do you know how it happens? Savings will decrease in value. Today, instead of buying chips with 10 taka, I put it in the bank. Now two days later, if I see the price of a chip is 20 rupees, then the savings matter has been killed by itself!
Many of us have bought bonds or seen someone buy bonds. Through these bonds, the government actually borrows money from us. Today, the government sells fifty rupees bonds and uses that money, and a year later the government returns fifty rupees, it's like this. Now, if you buy a bond of fifty rupees from the government, after a year after collecting that money, if you see that you can buy less amount of rice for fifty rupees than before due to inflation, then naturally you will lose interest in buying the bond.
If the bonds cannot be sold again, the government will also be deprived of the necessary funds. Due to the uncertainty of the purchasing power of money, businesses will lose interest in investing. There will be instability in business. In a country where inflation occurs, the country's currency will depreciate relative to other countries' currencies. Suppose the rate of inflation in Germany is 20% per day, and 0% in India. That is, the price of a product of 100 rupees will be 120 rupees in Germany tomorrow, but it will be 100 rupees in India.
In that case, one Indian rupee will be worth 1.20 German marks (German currency). We know about Zimbabwe's abnormal inflation. There is a saying that one had to go to the shop with a bag of money to buy a packet of bread.
The word is not very wrong, billions-trillions of Zimbabwean dollars have been deposited there. This abnormality has started since 2008. Zimbabwe's economy has been in dire straits since the 1960s. In the twenty-first century, it took an extreme form. The Mugabe government decided to print large amounts of money to prop up the economy. This decision led to the reverse destruction of the Zimbabwean economy. Due to the printing of large amount of money, the price of goods started to increase. Currently, Zimbabwe's inflation rate is 98% daily, which means that what is worth Tk 100 today, will be bought for Tk 198 tomorrow! Think about it!
But it is not the highest rate of inflation. This unpleasant record is that of Hungary, in 1946 the rate of inflation in that country rose to 195% per day. The country's debt that is paid off with extra printed money, spent in that country, will come back to its own country. Because our country's currency has to be accepted by the people of my country, other countries cannot buy with this currency! So
Parambrata's wife in the hospital the day after the wedding
The extra money is entering the economy of our country. Another important point is that this money cannot be used to repay foreign loans directly, because the loan agreement has an obligation to repay it in a specific currency. Creating more money is not the solution to develop a country's economy, the solution is to increase production. As a result, people's purchasing power will increase. If you want to develop the opposite, the development will be the opposite!
