Money from thin air
Lets pretend I just got a job and was able to purchase a king-size Snickers bar after work. Boy it tasted good and it sure was worth the .89 I paid for it, so I decide to buy another one. That one was enjoyable, so I buy a case of them and start eating them on my way home. Man, I’m really starting to get full, and I don’t know what I’m going to do with the other two dozen in the box. I get home and realize the store owner saw I liked them so much, he sent me four cases and a bill for them. Well, now I just finished my fourth and can’t eat another one, but I’ve got almost five cases and a bill to pay. Suddenly, those Snickers bars aren’t worth .89 each anymore. You’d be lucky if I gave you a nickel for each.
Well, we’ve got banks that are needing propped up by the federal government now. They have been promised $200 BILLION more. Where does that money come from? It gets printed and delivered. Now there is suddenly $200 billion dollars more in the economy. Remember the candy bars above? The first one was great, candy bars were scarce. Then I got nearly five cases. They weren’t worth much to me anymore. Same thing happens with the dollar. If they aren’t scarce (to a degree), they’re worth less. Same old supply and demand. Too much of something and the value goes down, because everyone has them and they’re easy to get.
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