It is not the quantity of fiat money that provides its value, for what is the source of the scarcity when any quantity of new cash may be printed? Instead it is derived from a legacy attitude to printed money, which was once representative of redeemability for a commodity, as well as the changing quantities of money held by individuals.
If people like paper money, and a have a feeling of wealth when they possess a high number of notes, then more notes will heighten this feeling and reduce their particular demand for more notes. It is the changing quantity of notes which affects price, not the absolute number, for on that there is no limit.
It doesn't matter how many notes there are, they have no scarcity.
Selling labour, or other property for paper is a bad trade, it is better to be the one selling the pieces of paper.
Thursday, 18 March 2010
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