Originally posted by AThousandYoung
What would happen if a nation based currency on people (instead of gold, for instance) and printed money to hand to every adult - their share - when they reached adulthood?
I don't advocate this. It was just a thought. What do you think?
The dollar would rapidly grow in value relative to goods and other currencies. Even if the rate of money supply growth matched money demand growth in the US, there is a lot of demand for dollars overseas.
Edit: It could lose its value as KN suggests if people found that the eventual extreme shortage of dollars made them basically useless for currency so that a different currency became used for trade. Then demand for dollars would drastically fall.