If a country is in dire need, as in Africa for example, why can't that country's currency production be increased to pay for such things? Who decides how much the Canadian mint makes, and why can it not make money to meet provincial needs?
Unrestricted printing money without some form of bond issuance (borrowing) by the government is a recipe for hyperinflation. That is what is happening in Zimbabwe today, and what happened to Germany during the Weimar Republic. The national currency becomes worthless.
The canadaian Government, like the US, cannot just "make" money without issuing some debt instruments or retiring old currecny from circulation.
One legitimate way to increase the amount of demand deposits ("cash"" in circulation is to lower interest rates and also flower the fraction that banks have to hold in Rederal Reserve accounts. Then it is the banks that increase the money supply, by opening checking accounts and paying checks written for borrowers.
First, Africa is a continent, made up of many different countries with different currencies.
It sounds like you believe that just printing or coining more money will solve a country's financial problems. It does not work that way. However, since I am not an economist, I cannot explain why.
As far as Canada is concerned, especially since this is not my area of expertise, I searched Google under the key words "Canada mint production" and "'Canadian mint' production" to get these possible sources:
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http://en.wikipedia.org/wiki/Royal_Canadian_Mint
http://en.wikipedia.org/wiki/Canadian_coinage
I hope this helps. Thanks for asking.
It is important to understand that increasing currency production alone is not sufficient to address a country's financial needs or improve its economy. Here's why:
1. Inflation: Printing more money without any corresponding increase in the production of goods and services leads to an increase in the supply of money in circulation. As a result, the value of each unit of currency decreases, leading to inflation. This means that more money will be required to purchase the same goods and services, which ultimately erodes the purchasing power of the currency.
2. Hyperinflation: If a country resorts to excessive money printing without proper economic management, it can result in hyperinflation. This occurs when the value of the currency rapidly and uncontrollably decreases, leading to skyrocketing prices, economic instability, and a loss of confidence in the currency.
3. Debt and borrowing: Governments typically rely on borrowing through the issuance of bonds to finance their spending needs. This borrowing allows the government to inject money into the economy while also ensuring that there is a mechanism in place to repay the borrowed funds in the future. Printing money without a corresponding increase in production or borrowing would essentially create more money without any underlying economic value, which can have severe consequences.
4. Monetary policy: The production and regulation of currency is typically managed by a country's central bank, such as the Bank of Canada. The central bank has the responsibility of maintaining price stability and promoting economic growth. This involves carefully managing the money supply, interest rates, and other monetary policy tools to ensure that the economy remains stable and inflation is kept under control. Decisions regarding currency production are made based on these goals and economic considerations.
It is also important to note that Africa is not a single country, but a continent with multiple countries, each with its own currency and economic situation. Therefore, the economic challenges and solutions may vary among different African countries.
In conclusion, simply increasing currency production without proper economic management and consideration of factors like inflation, debt, and monetary policy can have detrimental effects on a country's economy. It is necessary to take a holistic approach to address financial needs and implement sound economic policies for sustainable development.