I think fiction money is a better term. So am I right to
say..
A country which is able to incur debt and take it out in terms
of tax and inflations strengthen it's own currency since the
circulation of that currency is lesser than the other? Thus, if
Country A produces 10,000kg worth of goods per/sec and create
$20,000 per/sec. Each kg is valuated @ $2 while compared to Country
B where only $10,000 is made thus each kg is worth $1. Thus Country
B's currency is much more valuable?
IF debt = money, consider the US national debt,
wouldn't it by logic that they have more money? Thus with more
money in circulation the people are richer compared to Britain
where there is lesser money? Is it due to the amount of physical
treasure that the UK had plundered during the early days?
you almost completely misunderstood what i said... the fake
money was just an example of how values can weaken for one, i did
point out that the markets are usually far more influential and by
that i meant the overall wealth of the nation.
in regards to the amount of a currency present affecting it's
value you have to think of the amount of currency in regards to
national wealth - if you think of the world having one overall
(imaginary for this purpose) currency and each nation has a
specific amount of that currency, if one nation has 100 of that
currency and another has 50, but the first nation prints 200 of
it's own currency to show for that and the other only prints 50
then the second nations currency will be worth more than the first
despite it being a poorer nation.
