How can money be created?

[erwin_rommel]

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Well then maybe, why can't countries work all together? I mean, each country will be allowed to create more money on their own so that there will be no nation that will suffer from financial crisis. In that way, maybe there'll be no one living in poverty 'coz each one who works is well compensated.

basaha og balik tong mga post sa taas kay murag wala gihapon ka kasabot bisan gi detail nga og explain

[giddyboy]

simply put, printing of local currency is REGULATED and has a certain limit. They are printed and regulated by our Central Bank (CB). Generally, the basis is on the economic reserves of our country and the valuation of our peso against international currencies like the USD or Euro. We also follow international rules on monetary policies in order to transact business with other countries properly.

as to how many are printed for a certain period of time, it is quite complicated. The most important thing is CIRCULATION. That's why one time, our CB is encouraging people not to store a lot of coins in their piggy bank but instead spend it or place it in banks. otherwise, they would not circulate. there's also this thing about "money laundering". you can't bring peso bills (and coins) outside the country with more than a total set amount by law as it would be tantamount to ECONOMIC SABOTAGE.

also, old bills and coins including worn out bills once they circulate back to banks will be replaced by new, fresh, crisp ones.

lastly, CB encourages people to respect our Phil peso and not to tamper or vandalize them. The faster they deteriorate, the more costly it would take CB to replace them w/ new ones.

[doctor_wat_son]

kakuha na ka bai ug nganong dili gyud modaghan atoang kwarta?
tungod na kay hangtod diay karon nagsige pa diay ta ug printa para ilis sa kadtong mga nangadugta na nga mga kwarta.

Dali ra gud unta kaayo na pag printa ug kwarta pero unsaon man sad ning atoang pang-gobyerno nga mga tapulan man kaayo. makita man bitaw na nimo sa mga politiko. awa, naa ba silay mga gipanghimo diba wala gyud. gasige ra man na sila ug lingkod. mga tapolan na sila bai. mao na.

ug kita pud bitay maghimo ug kwarta, pangdakpon man sad ta. so, wala jud tay mahims.

ok na? hehehe

[erwin_rommel]

kakuha na ka bai ug nganong dili gyud modaghan atoang kwarta?
tungod na kay hangtod diay karon nagsige pa diay ta ug printa para ilis sa kadtong mga nangadugta na nga mga kwarta.

Dali ra gud unta kaayo na pag printa ug kwarta pero unsaon man sad ning atoang pang-gobyerno nga mga tapulan man kaayo. makita man bitaw na nimo sa mga politiko. awa, naa ba silay mga gipanghimo diba wala gyud. gasige ra man na sila ug lingkod. mga tapolan na sila bai. mao na.

ug kita pud bitay maghimo ug kwarta, pangdakpon man sad ta. so, wala jud tay mahims.

ok na? hehehe

utro pud nga wala kasabot

[MRchurchill]

To understand the basics think primitive as in really primitive.

Ok ingon ani ni:

Let's say you raise pigs and this is your only profession. However you want clothes, you want materials to build shelter. So what do you do? You trade some of your pigs to a tailor for clothes and some to someone who has lumber or whatever for the materials. This is called BARTER. You trade a commodity for something with perceived equivalent value.

Pero let's say naa mahitabo na ang tailor or ang kanang taw na daghan og materials di na ganahan og baboy. Looy kaayo ka diba? Samok na kaayo musuroy jud ka og layo para kakita og ma barteran sa imo goods.

But what if naay mudawat og bisan unsa na goods nya sya nalang bahala mangita og buyer? Let's say kaning mudawat sa imo goods mao ni sya ang government mismo in the form of a bank. Mas nindot diba? Di na ka musoroy og layo. So ang imo buhaton is imo nalang e deposit imo baboy ngadto niya and as guarantee tagaan ka niya og document depende sa worth sa imo gi trade. Kana na document nag represent na sa value sa imo gibilin didto. So kana na document mao na na sya ang money.

Let's say magpataka nalang og himo og documents ang kanang bankoha or government agency bisan walay gibilin daghan na kaayo mga taw nagkupot anang kwartaha. Inig redeem nila ana unsa may ikahatag sa bangko?

So mao na mugamay nalang ang value sa kuwarta if cge ka print. Di tawn na magic paper oi na naa value by itself. That piece of paper issued by the Central Bank guarantees something in the form of a commodity be it gold, rice, oil, or bisan unsa man na.

[johnbond007]

the basis is on the economic reserves of our country and the valuation of our peso against international currencies like the USD or Euro. We also follow international rules on monetary policies in order to transact business with other countries properly.

What's being referred to as economic reserves? And how is restriction of the printing of more money related to the valuation of peso against international currencies?

[graveyard666]

hahayz... dugaya kasabot sa thread starter oist. bisag naa pud ko ana nga pangutana, nakasabot nako sa links ug explanations here... google is your friend dude. and widen your mind perspective to analyze technical terms to primitive thinking.

[moz_k2]

Ambot nimo oi...

The currency value is based on gold reserves.
Its a standard, period.

Money just represents the value of our reserves.
Its just a special paper with special ink and security feature, and thats it.

"And how is restriction of the printing of more money related to the valuation of peso against international currencies? "
Example:
Let say our country has 1000Kg of gold reserve and value of gold is $1000/kg.
So the country's gold reserve is worth $1,000,000
If the Central bank would print 1,000,000 pesos only of money.
So that's 1:1 ratio, so dako ang value sa peso.
If the central bank prints 1 billion pesos, now you do the math.
That 1billion pesos represents the 1000kg of gold reserve.

[doctor_wat_son]

maayohang moz_k2 uy!
kana maoy simple explanation.
syaro di masabtan. simple follow cannot instruction?

[giddyboy]

a simple simile from Lapu Lapu's time:

tag-iya (owner) sa baboy (pig) is like the Philippines

the baboy is like our economic reserves (i.e. gold, silver, etc)

let's say 1 sigay shell "represents" the value of baboy during Lapu2x time.

The sigay shell is similar to the Phil. peso in circulation.

so therefore:

(1) one sigay shell "represents" the economic reserves of the pig owner which is the baboy.

(2) total Phil. peso in circulation "represents" total economic reserves of Phils. (gold, silver, etc)

Money is just a "representation", printed in special paper w/ special ink by a regulated body (Central Bank)...

and as what moz_k2 explained:

if the Phils has US $ 1 billion worth of gold reserves,
it gives the Phils. the right to print or circulate 1 billion worth of US dollar bills.
but since we only print and use Phil. peso currency for local transactions, and the exchange rate is around 45 peso to the US dollar, we print & circulate peso bills & coins worth 45 billion pesos...IZZATCLEAR?

syaro wa ghapon kashabot...