If Governments use FIAT currency, why do we have inflation?

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If Governments use FIAT currency, why do we have inflation?

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Anonymous 0 Comments

Your responses thus far mention *”Why does it matter if the government prints off more dollars if there’s no value backing the dollar?”*. Money is usually the only authorised means of settling taxes Dollars are used for buying things.

More to the point, it is also used for paying taxes. More to your point however – money is used for buying things. The more money there is in circulation (without a proportionate increase in goods), the more competition money has, reducing the purchasing power of each unit of money.

One more thing – we don’t normally take “money printing” literally to mean the production of physical money. Instead “money printing” tends to refer to the expansion of fiat currency supply.