Why does our Goverement think they can solve the problem of Inflation, by creating more money out of thin air?

The Federal Reserve is cutting interest rates in order to stimulate economic activity.





Remember the formula: M x V = P x Y





Y is output, and they are trying to increase Y. The bigger the increase in Y, the less the increase in P (price). The Federal Reserve wants to get people spending again to stimulate the economy but there is always the risk of inflation.





The Federal Reserve has slashed interest rates to virtually zero, so people must not be spending at the minute. If there is more money in an economy, you would expect that people would spend more and the INCREASED DEMAND FOR GOODS AND SERVICES would then drive up inflation. But people don't seem to be spending money and that is why prices are being slashed to promote Christmas sales.Why does our Goverement think they can solve the problem of Inflation, by creating more money out of thin air?
Because inflation is YOUR problem! The govt benefits hugely from this legalized debasing of currency. IF you counterfeit, you may increase the money supply 10%, but 100% of the increase is yours. Therefore, while the pie shrinks, your share increases.


Remember, all printed money is originally property of the govt, to spend value it didn't create. Inflaiton is the secret tax, as is fractional reserve banking.Why does our Goverement think they can solve the problem of Inflation, by creating more money out of thin air?
IT IS REALLY A VERY GOOD QUESTION FROM PUBLIC





the problem is world wide inflation





if inflation only in india no one create more money . being the inflation is world wide one has to create more money. more money means giving liberal finance particularly export oriented units to have liquidity problem. see what happens when complete world is in the problem of inflation industries who are supplying to other country , they are not getting payments for the supplies made or late payments from the buyer .





for this purpose one has to pump money to support and do normal production as well survival of industries
that isnt what they are doing.