QUESTION: Hello Martin, can you explain to me how a currency would sustain value for international trade if a country, like Canada (where I live), did what you suggested and stopped issuing debt and just printed money to level that was 5% – 10% of national GDP? would it depend on the attractiveness of what a country exports eg: Canada exports oil, lumber, crops like wheat/soy/canola, minerals – both precious and functional? What would happen to a country that didn’t have exports as a significant portion of it’s GDP? I am curious about how currencies would react to your restructuring plan that eliminated the need for a country to issue debt. Thanks for all your insights and theories. Very helpful.
Trapped in Canada with an egoistic misguided Prime Minister who doesn’t appear to like Canada (he keeps telling us how awful we are) or Canadians, he prefers spending time with global elites and is following their plan even though it damages Canada pretty significantly.
ANSWER: Right now, every country spends more than it takes in. The deficits are funded by selling debt, which then competes against the private sector. The interest rates rise and fall on sovereign debt based upon the confidence from one week to the next. If they stopped borrowing, then the capital investment would turn to the private sector, creating more economic growth. If income taxes were eliminated, the economy would grow based upon innovation which is what it should be driven by.
The confidence in the currency would simply depend upon the strength of the economy, as was the case for Athens and Rome in ancient times. Their coinage was imitated because they were the dominant economies of their time. The value of a currency is the strength of its economy…
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currency, currency value, money, martin armstrong, armstrong economics, money printing, debt,