hi.. economic management is not so easy my frnd. more money in circulation wd add to inflation. it means that for a small quntity of goods, we will have to pay more. it may ultimately lead to a basketful of money to buy a pocketful of goods. thank u for the gd qn.

Ahhh, the Argentinian strategy!

A government bondholder (someone who buys government debt) cares about 2 things when buying bonds: 1) inflation and 2) currency exchange movement since both affect the real returns of the bond.

Let’s say you are a German buyer who is evaluating a 1 year UK bond yielding 5%. If next year, you think UK inflation will be 6% and the pound will drop 1% in value, your investment will yield a -2% real return (1% loss due to inflation and 1% loss to due currency depreciation).

When a country prints money, it causes inflationary pressure and pressures that will depreciate its currency. So printing money never solves issues with debt. Rather, it exacerbates the debt problem by resulting in fewer international lenders who will demand much higher interest rates. When this is mismanaged (as it has been in the past), it usually leads to debt spiral that usually results in country default and a collapse in its currency.