What happen if you print too much money -- Reading Ray Dalio's "How the economic machine works"

Why not government print more money? -- Getting into the real world, I am trying to know how the world's economy runs, but as a newbie, I need time and experience to understand. This is the least thing I can do for me, I summarize from this book called "How the economic machine works" by Ray Dalio, the summarize is mainly about what happen if you print too much money.

  1. Money circulation creates demand
  2. Supply co-op with demand, thus generate more productivity by hiring more worker (reducing unemployment rate)
  3. Supplier realize demand is still increasing, even though productivity is already max, so they invest in machinery, etc. 
  4. Supplier realize demand is even still increasing, making the price of product insanely high
  5. Workers ask for higher minimum wages
  6. Inflation is uncontrol able, the price of product increase each day, making people doesn't want to keep cash, they keep buying product each day, live day by day
  7. Supplier also doesn't want to keep cash, thus keep investing in machinery and expanding
  8. Both supplier and worker doesn't want to keep cash since it is so volatile, making cash velocity increase maximum
  9. Bank needs to co-op with the cash circulation of supplier and worker, until they reach maximum capacity not able to print that much money
  10. Shortage of cash happen, bank cannot liquidify cash, supplier can not borrow and pay the worker anymore, thus business stops
  11. Supplier reduce transaction frequency since no matter how hard they keep up, it will ended up in bank not able to liquidify cash
  12. Reduction in transaction so supplier rely more on product rather than cash (no faith in currency anymore)
  13. Reduction in transaction meaning worker get less hour work, unemployment rate increase
  14. Recovery needed to create new currency to stabilize

As a learner, it is a common situation to have a wrong understanding, therefore it is great to have readers who have deeper knowledge for economics, and it will be a great pleasure to have you kindly do some corrections.  

Book Title: How the economic machine works
Author: Ray Dalio

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