Mastodawn

Art35ian Jul 10, 2023

How do governments reconcile money that flows out of their country?

How do governments reconcile money that flows out of their country? - LemmyWorld

Australia has a lot of foreign businesses and it has a lot of immigrants. Both earn Australian dollars and huge amounts would be sent back their country of origin. His does Australia balance its books on something like this? How do the economics of it work? Would it lower Australian inflation but shortening the money supply, and raise inflation of the destination country as it prints more money to exchange the Australian dollar?

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neuromancer Jul 10, 2023

Would the immigrants not be a net positive, for the country, as long as they earn the money?

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Art35ian Jul 10, 2023

Well, I don’t know. Let’s say a Bangladeshi guy earns $1,000 AUD and sends $500 home each week, then lives off the remainder.

He’s only contributing to the Australian economy $500 per week instead of the full $1,000 in bank-invested savings or other purchases. Meanwhile the other $500, minus an exchange rate, sits in another country’s bank or contributes to purchases there, fuelling that economy.

I mean, I’m guessing here. My economics knowledge is fairly limited.

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mister_monster

Yes, but he’s actually producing wealth in Australia. The things he does serve Australians, the products he makes wind up in Australian homes, and when they don’t, when they get exported, that same amount of capital he exported and then much more winds up flowing back into Australia.

Remember, money isn’t wealth. Money doesn’t fuel an economy, production does. And it does more than fuel an economy, it is the economy.