Supply of money

L$190.4475/US$1.00 When a country prints new bills, they are usually meant to replace older damaged notes. It is the job of the Central Bank to collect the old bills and destroy them and infuse the new ones. If you do not replace defunct currency, but just adding to money supply, you undermine the currency. We saw this in the Weimar Republic in the 1920s. In Zimbabwe, Mugabwe thought he was smart and started printing money to be able to pay govenment employees. In Venezuela today, Madouru is doing the same thing. In the short term, you may seem to solve a problem, but very shortly after, the currency is soon not worth more than what it actually is, paper. At this stage, when a country issues more money than it has backing for, you get increased inflation. Inflation is the increasing of prices, or really the decreasing of the value of the currency. In Weimar, Zimbabwe and Venezuela the printing of "new" money just kept on and on. This caused HYPERINFLATION. In the end, to buy a loaf of bread, the equivalent amount of money had to be carried in a wheelbarrow. Luckily, we are not here yet, but the tendencies seem to be ther. Wake up now, and smell the coffee.