Why does the money supply of an honest country go up?

Question

I understand how governments that print money to pay bills would increase the money supply but why in a country like the US has it gone up consistantly for over 100 years? Who introduces the new money and therefor benifits from it?

Answer 1

if your referring to our (U.S) country as a " Honest" country you are WAY OFF brother, and money ( paper or linen w/e) means nothing its all about the gold and other natural supplies and Alaska has a lot of gold well used to anyway, Money just Represents it, and all the trading with other countries gets you money, buying cheap clothes selling it for more stuff like that

Answer 2

The money supply of an honest country goes up if the amount of goods and services being produced by that country goes up.  If the money supply didn't go up and there's more stuff to buy with it, prices have to go down to compensate.

Answer 3

We use money in exchange for "stuff".  Dell computers, Ford Trucks, Pizza Hut Pizza or whatever.  

Now a couple of things can happen.  As time goes by the population of the US goes up through births or immigration, or maybe people figure out better ways of doing things (computers were invented, automation, sewing machines instead of thread and needle, etc.)  The point is that if there are more people making more stuff and more people buying more stuff, then you need more dollars to exchange between these people.  

So an increase in the money supply is a very natural and necessary thing.  We have averaged about 3% over the past 100 years and that is not really something to worry about.  

Now, what can happen is if you have more money than you have "stuff" the money becomes worth less.  

So a country's government can borrow a bunch of money while the money is worth more, intentionally print too much money, and then pay back the loan when the money is worth less.