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phiwong t1_j2e3cbg wrote

At a fundamental level (ignoring macroeconomics for the moment), money is a measure of value. Money is used as an intermediary to exchange of real goods and services.

Start with the idea that there is a deserted island with 2 people, A and B. A grows coconuts and grows 10 per year. B grows mangoes and grows 20 a year. Without any money, they decide to split their "production" through trade. B gives 10 mangoes to A in exchange for 5 coconuts.

Now they decide that they will "print" 30 dollars. Initially split between them equally ie 15 dollars each. Since this 15 dollars each is used to trade for their equal share of the goods, 5 coconuts trade for 15 dollars ($3 per coconut) and 10 mangoes trade for 15 dollars ($1.50 per coconut). At the end of the year after all that trading A and B both still have 15 dollars each and would have traded their goods through money. This is a stable situation that can simply repeat year after year.

Now say they decide that instead of 30 dollars, they want 300 dollars in their economy - so they print 270 dollars more and each now have 150 dollars each. Are they now "richer"? Do either of them get more mangoes or coconuts?

If you understand this example, then it is a start to understanding why printing money does nothing (at an ELI5 level) to make people "richer". People consume goods and services - money is just a means of exchange. More money without more goods and services is essentially meaningless.

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