Why does paper money *expire* when the country of origin still exists?

  1. privateye2500 profile image42
    privateye2500posted 8 years ago

    Why does paper money *expire* when the country of origin still exists?

    I really do NOT understand how a country (like Mexico) can print money and then say it isn't worth its face value.  I have a 5000 pecos bill from 1989 and apparently it is now Not Worth 5000 pecos - arrggg.

  2. ledefensetech profile image71
    ledefensetechposted 8 years ago

    It's called inflation.  As a country increases the amount of printed money or credit, the value of that currency falls.  Since 1913, for example, the dollar has lost about 95% of its value.  A dollar today buys only 2/3 as much as it did in 2000.   Inflation tends to destroy a currency.

    When the value of a nation's currency is close to or at zero, the country just starts printing a new one and basically they say a peso is now worth xxx dollars. It's called devaluating the currency and it's a way for governments to get out from under massive amounts of debt.

    Problem is that this screws any foreign investors in your country and you can hear the sucking sound as they pull their investment money out of your country.  That's why Mexico's economy crashes whenever they debase their currency.  It's good for the government, bad for the people.

    Personally I think something like that will happen here in the US soon.  We, too, are under massive amounts of debt that we can't possibly pay back.

  3. Cagsil profile image59
    Cagsilposted 8 years ago

    The origin of paper money is baseless. The principles for which "paper" money exists is manipulated economics.

    America's currency is based on Saudi Arabia Oil resources. We leverage the "dollar" against the value of foreign oil.

    Originally, America based it's currency on Gold and/or Silver. When paper money was established, it was completely baseless, which drove up markets and growth in America. But, when World Leaders of other Nations learned of America's baseless "paper" money, baseless currency was outlawed, because of the destruction it could have on World Markets.

    America, at that time, switched to a currency based on Gold. When America ran out of Gold? Meaning it was broke!

    The Federal Reserve Bank was enacted, to stablize the Economy and allow Government operating expenses.

    Please realize: the so-called "paper" money you own or have in your possession is almost worthless.

    To be completely honest- the $1.00 or $100.00 bill you have are worth exactly $.05 and nothing more. Each are an "IOU" given to you from the Federal Reserve Bank.

    America HAS NO MONEY and hasn't for years!