Trinity,
A capitalistic economy based upon fiat money is a multi-variate environment.
Increasing the money supply does what GV says, but other things as well. An increased money supply with a strong demand for goods and services is one thing.....the velocity of money (how many times a dollar turns over) is another....
e.g. You buy a loaf of bread from the grocrery, the grocery takes that dollar and pays the baker....the baker takes that dollar and pays the farmer for the wheat....the farmer takes that dollar and pays for fuel for his tractor, etc....as a result the economy gets overheated and inflation soars.....unchecked inflation will result in a barter economy...i.e. the dollar looses its perceived value, and people will accept it no longer, and will only accept barter (durable goods and services) instead of worthless paper.
Now, compare that to your taking that initial dollar and stuffing it into your mattress.
The Banksters put the breaks upon the economy by raising interest rates.......also, by modifying fiscal policy (i.e. taxation)
The important thing to understand is that in the US.....the government has the right to print its money for free.......but the Banksters crammed the unconstitutional Federal Reserve down the citizens throats.....and that the FED is privately owned.....yes, a relatively few individuals have an interest in it mainly by banks in which they own the controlling interest/ownership.
Now, instead of the government printing its money itself for free.........it lets the FED print it out of thin air, and lend it to the government at high rates of interest. As you will see, in video below, the annual aggregated personal income tax just about pays annual interest on the debt.
Now, further, the Banksters spawn and finance these prolonged pointless wars (they call them conflicts....e.g. Korea, Viet Nam etc.) because useless wars are great for business.....they rack up the debts.
The US and world economies are a ballon that is blown out of proportion. When they trigger the deflation (which they will to bankrupt the US and remove it as a superpower and thereby facilitate their nєω ωσrℓ∂ σr∂єr ...as they did with the USSR) you will see a collapse unlike history has ever known.
Watch this:
BTW, John Kennedy bucked the Freemason Banksters....he had the Treasury to begin printing its own currency, and he spoke out against the Banksters publicly. Listen to his speech here:
http://groups.yahoo.com/group/era-of-peace/message/339and we know what happened to him......
BTW, Earl Warren, Arlen Specter, and Gerald Ford were Masons that sat on the Warren Commission and determined that a lone gunman with a sorry Italian rifle shot both Connoly and Kennedy and the bullet defied physics and flew around in the air and hit both men from different angles....and that inspite of the fact that Kennedy's head flew backwards indicating that he was shot from the front....reeeeealllly, he was shot by the lone gunman from behind.....and so on.
These Banksters blackmail presidents into doing their will....or they will create economic problems of significant proportions....including not underwriting the national debt.
Read the links in my initial post above.