>>When the USA prints a bunch of new $$ and uses that to pay for goods and services, that is borrowed effort. <<
<So all you mean is credit creation? >
CB, Yes, and a great game it is. Imagine having a printing press in a spare room which you could use to run off another $10 billion time after time after time. You could do some serious shopping. As long as more and more people want it and the trading continues and economic growth continues, you could go right printing more and more and more and more and more without devaluing its purchasing power, despite huge dilution of existing holders.
Money printing is the most profitable export imaginable [that I can think of right now anyway]. Maybe a better export would be the other factors which make the USA so wealthy because that would make the demand for US$ huge. Those factors would have to be given away because there's no copyright on having free markets, free people, private property, rule of law, enforcement of contracts and so on. Anyway, the USA didn't invent them. But it would be worth giving them away and even providing free training, because, for example, if India adopted USA capitalist laws, India's demand for USA products and services would be vast. They would buy 2 billion CDMA devices, for a start.
The British tried exporting their wealth-creating systems, but maintained political control as part of the exporting process. The silly Indians told the British to leave but didn't keep the good ideas. Not enough of them anyway.
If the USA could find a way of exporting the wealth-creating systems, it would be a great move. Afghanistan is the first place that could be converted from feudal ways. Then, exporting more US$ could continue even faster, as well as exports of other goods and services.
I bought into the game years ago. Having free markets is a good way to entice other countries' citizens in, but that depends on the other countries allowing their citizens to buy in. It was illegal in NZ until 1984. We were little serfs of the state [still are really].
There is no upper limit to wealth.
Theories for the day,
Mq |
