What Actually Happens When a Government “Prints Money”?
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In economic discussion, you may often hear that a government is “printing money” and then picture sheets of hundred dollar bills coming off a printing press. In reality, this is not what actually happens in every sense of the term. Printing money, or money creation, most often involves creating money that is not physical. Central banks do not even have the power to print physical money or mint new coins – the Treasury department does. So what exactly happens then?
In economic discussion, you may often hear that a government is “printing money” and then picture sheets of hundred dollar bills coming off a printing press. However, most often this is not what actually takes place when a government adds to the monetary supply. Money creation in modern economies usually involves creating money that is not physical. Central
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