Breadtube / Leftube

Don't forget the influence of the petrodollar. Everyone uses the dollar not necessarily because they want to, but because the US has taken actions to ensure that oil can only be traded in dollars. This is part of why BRICS is seen as such a threat to US hegemony. If Saudi Arabia, Russia, and China are all agreeing to trade oil in something other than dollars, then suddenly the solvency of all of the economies of the world are far less reliant on the solvency of the dollar itself.

Yes & yes & yes. To understand the international aspects, my go-to is Michael Hudson.

Yeah look at what happened to Zimbabwe when they tried to print more money. The currency got devalued to the extreme, people's entire pensions could only buy a carton of eggs.

Something did inflate, actually: the price of assets, meaning stocks, bonds, real estate. In other words, the rich got richer.

You know who drives me up a wall in that regard? Richard Wolff of Democracy at Work. I suspect he actually knows what’s up, but refuses to stop talking about [federal] taxes that way. Maybe he finds it to be rhetorically useful, but I think he’s ~~his~~ underestimating his audience and doing them a deep disservice.

Taxes exist to give value to money. Basically, when a government prints money, that piece of paper has no inherent value. You can conduct your business in seashells if you so decide.

However, at the end of the year, you're going to want to convert your seashells into your government's currency in order to pay your taxes. And that is what gives the currency value. The amount that is taxed depends on how much liquidity there is in the economy. If there's too much money around, higher taxes would reduce that.

This is a fairly poor explanation of how it is, you could read "Macroeconomics" by Mitchell, Watts and Wray for a more in-depth explanation including historical examples using "sticks" for taxes.

Taxes are imposed by the central authority on the working population to get them to start working and producing real, tangible goods and services, which generates the value of the currency.

https://www.youtube.com/watch?v=75udjh6hkOs&t=1705s

They maintain demand for the currency. We can't pay our taxes with anything but fiat. Bastards wouldn't take my dozen head of cattle 😢

As far as I understand, taxes are used to finance services that capitalists refuse to provide, but more importantly, taxation is used to I think limit the supply of money. The government can print all the money it wants and nothing is inherently wrong, but that would devalue the currency. Be aware that I could be totally wrong.

Countries that possess monetsry sovereignty can always print their own currency. But I do agree that the currency will be deemed undesirable if it's not backed by the sufficient quanity and quality of goods and services.

I don’t think that’s entirely accurate, but I’m not knowledgeable enough to address it directly. Instead I’ll quote from Michael Hudson’s book J is for Junk Economics.

Hyperinflation:

Nearly all hyperinflations have stemmed from trying to pay foreign-currency debts far beyond an economy’s ability to earn enough foreign exchange by exporting (see Balance of Payments). (An exception is the case invoked by today’s budget-deficit scaremongers: Zimbabwe’s practice of simply printing domestic money without taxing it back.)

John Stuart Mill explained in 1844 how paying foreign debt service (or military spending as occurred during Britain’s Napoleonic Wars) depreciates the currency. This makes imports more expensive and increases the debt burden as measured in gold or “hard currencies” against domestic currency.

After World War I, Germany was obliged to pay reparations beyond its ability to export. The Reichsbank simply printed marks to sell on foreign exchange markets to obtain the dollars, sterling and other currencies needed to pay the Allies. The plunging exchange rate that ensued raised the price of imports, and hence domestic price levels.

This phenomenon later became a chronic condition for Third World debtors, most notoriously in the hyperinflations of Chile and Argentina to pay for their trade deficits and ensuing foreign debt treadmill. The resulting currency depreciation invariably involves paying extractive foreign debt, not spending public money for domestic social programs or to increase employment. (See Implanted Memory and Inflation.)

Hyperinflation can be stopped by new borrowing (as in the case of U.S. loans to German municipalities in the 1920s and Third World bond-buying in the 1970s), but the cure ultimately requires a Clean Slate to write down debts that exceed an economy’s ability to pay. That is what occurred in 1931 with the moratorium on German reparations and inter-ally debts, and again with Argentina’s default in 2002 and subsequent debt write-downs.

I’ll add that, if a country has relatively self-sufficient domestic production to provide for its own people, then I don’t think foreign exchange rates would be so impactful.