Text book economy and real life economy may not match!!!!!! e.g. American growth going strongl but american interest rate at a low level So while talking about economics, or anything else like football, cricket, prostitution etc, there may be many factors acting at the same time and you never know in which direction the resultant force is heading. About the original question, i guess the answer have been already been given in some way or other by chipledhunga, indisguise and karmapa. So I am going to adress the issue raised by cryptonite, banking on whatever little knowledge i have. His/her question lies thus: @@@@@ I never understood the process of printing money. How does that work? Why doesn't a country print as much money as they want? What is there to stop them? Let's say Nepal decided to print a lot of money so that they could give a million rupees each and every nepali. The dollar to nepal value is 1 usd = 70 rs (approx) Why is that not possible @@@@@@ Lets assume Nepal govt prints a lot of money ( other things eg. productivity remaining the same). There will be overflow of money in Nepali's pocket (when government spends money in the form of general spending and development spending). Too much Nepali Rupees flowing without productivity would lead to inflation ( as you would be willing to pay, say,m Rs. 50 for a cup of tea) plus Nepali currency will depriciate against other foreing currency. 1 dollar would equal to say, 500 Nepalese Rupess. Thus in the end, things will only be worse, not better. On the other hand, if the government prints lot of money and the nepalese work their ass off proportionately to produce more products and services ( with more efficiency among other things), I woudl say, exchange rate would not change and foreign products would be cheaper and we all would be happy. But the bottom line is we have to work ur ass off or we have to work with more efficiency to match with the currencies produced by the government. p.s. Hushpuppy was claiming in some thread of havi9ng done mba in finance. Maybe she could help us?