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To: Suresh who wrote (17690)	9/1/1998 3:59:00 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69147

Hi Suresh, You do bring up an interesting point. I don't know much about international monetary policy, but I don't think a central bank can print an unlimited amount of money without causing a problem. It is true currencies are no longer on the gold standard. As far as I can tell though there is a gentleman's agreement by the central banks to maintain currency exchange ranges within specifc ranges in order to maintain stability. The exchange rates are a reflection of a country's GDP, debt, and preceived political and economic risk. So while it is true that a country's currency is not backed by a specific hard asset it is indirectly backed by the wealth of the country and its people. If you could expand the supply indefinitely you would have seen the South American countries printing more money during the Latin American crisis to buy their way out of their problems. Similarly, you see the Fed buying back US dollars to restrict supply and increase demand when the US dollar is under pressure. Now is a country's exchange rate set by some formula like taking the GDP numbers, discounting the amount of debt and then dividing by the amount of currency in circulation (this is a really simplistic example and not even based on fact), I don't know? Maybe someone else can take this one. It is a intersting point though, I don't know if there is a theoretical limit to the amount of money a country can have in circulation at one time. *********************************