When Money Is The Problem

By on April 10, 2018

The use of paper money dates back to the times of the Chinese in 800 AD. Many events happened along the way, where the paper money was used and abandoned and used again. It was during the Civil War that use of paper money to fund the soldiers became paramount. Today, money is the way things happen in the modern world. Without it, no business would exist; without business, no money revolves. In other words, the world would have not been what it seems today.

There are quiet a number of good and bad things when money is the problem. If for example, a country loses its currency and suffers from a greatly devalued currency. Although it is highly for a country’s currency to turn zero and worthless, there can be catastrophic consequences that the government and the people will face.

First, the demand for imports would drop to almost zero due to very prices that can no longer be afforded by that country’s currency. Also prices for almost everything will skyrocket. This is termed hyperinflation. Second, export demand would hit the ceiling. More countries would buy due to almost ground level prices of export goods. Third, most foreign countries then would look at that country as economically and politically unstable, thus their unwillingness to invest.

The upside potential is that the government may have a chance to consider starting again,if there is ever such a thing for countries, but, it seems to be like that for a country that has a way too devalued currency. Much like the computer’s reset when it gets stuck somewhere. However, the trail still ends up with one domino collapsing one after another.

There are many factors why this event might be feasible. But the fear of most is when too much politics gets into the arena that instead of the issues at hand are being addressed, most of the energy of policymakers and lawmakers are being diverted into something else. Although rarely does this concept happen, but like I said, it is possible.

In 2008, at the aftermath of the global financial crisis due to the enormous housing bubble rupture in the United States, the domino reached to as far as Iceland. The country was in the brink of a nationwide bankruptcy. Prices of goods soared high and stock market prices plummeted.

While its true that the world is being fueled by economies from the different regions through the different countries, governments and financial institutions, the world’s downfall can also be instigated by few of the world’s leaders and decision makers. Therefore, those that run governments and political machineries should be conscientious enough to put the interest of the majority above any personal intention and selfish gain.



Source by Greg Pierce

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