jz curious about this.

everyyear, malaysia prints new currency notes.
if overprint, currency drops.

but US can print , print and prints,

actually who control the currency ?

world bank


sorry. wrong info

http://en.wikipedia.org/wiki/Central_bank

This post has been edited by 9876789: Nov 1 2009, 12:19 AM

zety aziz

malaysia dont print any of their money..only our coins they produce.

mine fell from the sky... lolz

Btw if im not wrong, they weigh the number of "gold" in the bank and total up it's value then divide by the total number of money notes they have?

what formula is that??

Please don't spam. Warning can be issued by staff if posit being reported.

Money printing is controlled by respective central bank for the need of market.

You don't need any backing like gold to print the money, central banks can print at their wish.
But it is stupid you print too much of it, as it drives down your currency value only, eventually printing more doesn't mean have more money.

I don't know why so many people have this kind of mis-conception of need gold to print the money, may be influenced by USD gold backing (which is prior 1970's era, since after 70's, there is none currency in the world is backed by gold.

It is always about self-controlled by central and print according to the market and economy needs and monetory policy.

I read somewhere that the each country central bank still have gold reserves to back the value of their currency. When you do not have enough gold reserves and yet you still print money like crazy, the value will drop, very much like the Zimbabwean Dollar. But then, of course market force also plays a major role in the value of each currency too.

erk

if malaysia economy getting better, then central bank print more currency,
money value mantained.

if malaysia economy stable, but print more currency, value drops.

if malaysia economy getting better, but dont print currency, value goes up ?

betul tak this concept ???

if this correct, then malaysia need to push its economy up in a rate faster than it prints its own money.

Correct me if I'm wrong, but money is nothing more than an IOU. The money on your hand, is equivalent to the value in which you owe others for their favour and services.

And do you know, the US is in trillions of deficit, and is inherited by the current generations of Americans?
Do you also know, the government buys money from the federal reserve/central bank (which prints money), and gives IOUs (aka bonds) in return for the money they got (created from thin air). The interests charged on the government can only be paid back by borrowing more money from the federal reserve/central bank, which incur even more debt in interests (plus compounding), hence the great debt US is in right now.

Also, a small percentage of money exists on printed form. Majority of it exists in digital form.

Currency that is not back by physical asset, ie gold and silver.
The final value will be zero.


History doesn't repeat itself, but it does rhyme.
Mark Twain.

I like the way you explain. Simple and true enough.

The question that lies within most people head is that how's the process in Malaysia? Is it the same?

i think the value of currency is based on reserve of gold for particular country, correct me if i'm mistake

I wondered why it has to be owe others of favor/services from the beginning..

My idea of why US can keep on printing money is they still controlling the economy. Many ppl are holding and trading in USD. Oil as well.

So if USD drops, many large corps or ppl will suffer hence the economy and maybe RMB can be the main trading currency in future.

I have a strong feeling that I'm wrong, please correct me

Lots of misconceptions here , first of all you need to know what the Bretton Woods system is. In 1971 the Bretton woods system was ended officially ended by the US and hence the end of the gold standard. Before that, you could walk into an US bank and convert your dollar into gold.

Nowadays the greenback technically has no intrinsic value because so much dollar is in circulation compared to their gold storage in Fort knox. Ppl will ask why US dollar still so strong then, there are a lot of reasons but the major ones are being the USA has been a world power for the past 100 years most ppl see the dollar as a safe haven to store their assets although. Every pension fund in the world has some sort of exposure to USA treasuries, therefore the demand is there for the dollar.

When you buy treasuries you are lending the USA your precious money. Look at China's communist government for the past decades keep on investing in US treasuries. But since the US dollar keep on depreciating, after interest on their treasury investments they still losing 'real' value on their investment.
http://www.guardian.co.uk/news/datablog/20...ow-big-who-owns

For Malaysia, our currency/sovereign certainly does not contain demand anywhere close to what the dollar commands in the international market. Our central bank can definitely keep printing money but then our currency will depreciate quickly. You will see increasing food prices, house prices etc because so much currency is in circulation.

Lately, there's been talk of our debt approaching 55% limit set by our constitution but the UMNO minister say no problem 2% more still far away!! If you travel a lot and go to other countries, you will find food prices in country like Singapore and Taiwan are cheaper than Malaysia although their GDP per capita is higher than us. This just shows you how uncontrolled spending and money printing creates inflationary economy.

Just look at Ah Jib gor, election near go every kampung and hand out money and promises for more $$. Where the money come from?? Surely our tax $$ already used up breeding cows, so the government issues sovereign bonds on the international market to borrow $$ to use.

Isingapore gov debt already reached 96%

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Added on April 1, 2012, 2:29 pmBtw
I don't agree on always compare "inflation" with singapore wan,why?
Let take example of 1 basic food
Example an egg distributor selling to retail shop in malaysia at RM3.50per pack(10 omega eggs),then retail shop sell to end-consumer here also in malaysia at RM4.50

So should the same egg distributior export the same egg pack to retailers at Singapore at SGD3.50(RM9.25)??? and singapore retailers should sell it to singapore consumer at at SGD4.50(RM11.25)????
Or is it standard practice to sell the 10-egg pack at perhaps SGD2.50(RM6.25) or even SGD2(RM5),right?

Can see the figure?its seems cheap by SGD value but it already give more profits to the malaysian egg distributor

Many people are getting the illusion of singapore's "low inflation" eventhough its not,since cannot compare RM and SGD wan,due to many of their food necessities also imported from Malaysia,and many of food price follows the malaysia"s production-costs,not singapore production-cost

Try to challenge the singaporean to produce their own omega eggs and see how much it costs

This post has been edited by e36.hartge: Apr 1 2012, 02:36 PM

First of all, you need to look at debt in the context of foreign & local debt. Singapore is very special in a sense that most of its government debt are owned by CPF, which is EPF in Singapore terms, they have virtually ZERO foreign debt. Using these debt, Singapore government companies like Temasek and GIC have for years generated outstanding returns on their debt. And that money will flow back to their retirees, benefiting their people.

And don't kid yourself Singapore's sovereign debt rating is AAA, the government has not sold bonds on an international market to raise funds since 20+ years ago. To argue that Malaysia's debt standing is actually better that Singapore just shows how myopic you are, really.



Do you even know what you are talking about? Your example is poor at best, but I roughly get your idea.

In economics we can price something in the nominal or real terms. For your egg example, selling for MYR5 or SGD2.5 does not really matter, because surely you can compare food prices in real terms. You can convert price in Sin dollar into RM using today's exchange rate and compare which is higher. If something that sell for RM5, which is SGD2 retails for SGD1 in Singapore, is it not cheaper? So a country that has higher per capita GDP, but yet food prices in REAL TERMS are cheaper than Malaysia, do you NOT see what the problem is?? If you still don't understand, go enroll in a basic economics class.

u the one already failed,not me
basic economics class dont tech the comparison i just quoted
sorry kid,u got much to learn

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Added on April 1, 2012, 5:30 pm& this why singapore imported much of their food especialy from malaysia
coz to produce their own food,the costs wil be much higher & directly will skyrocketing their basic necessity expenses,& directly will make overall expenses there much higher

This post has been edited by e36.hartge: Apr 1 2012, 05:30 PM

Wow you are officially an idiot, ok you have no argument whatsoever so you call me a kid, rofl.

Singapore has no incentive to produce food themselves, their service industry fetches higher profits so they can buy cheap food from Malaysia. Malaysia cannot come up with the same level of services so have to resort to lower $$ making industries.

Does this simple concept get through to your seemingly obtuse mind? And btw, get a dictionary and learn how to type.