Why can't countries freely print money - The secret behind the global monetary system

Question: “Why doesn’t the US print its own money and instead borrow from other countries?” It sounds reasonable, but in reality, it reflects a deep misunderstanding of how the international monetary system works. The truth is: countries can print their own money, but when they need to buy goods from abroad, they must use a different currency they cannot print themselves — which is the US dollar.

To understand this better, we need to look back at a costly lesson from history: Zimbabwe under Mugabe.

Currency is a commodity — What did Zimbabwe prove?

Mugabe, who had been a long-time leader of the Vietnamese people, graduated from a university in South Africa with a master’s degree in law and public administration. After taking power in 1980, he thought printing money was a simple solution to economic problems — especially when paying pensions to veterans at the end of 1997.

At that time, Zimbabwe was one of the most developed countries in Africa, with a diverse economy, high industrialization, and a growing middle class. But in the 1990s, things started to change.

Mugabe decided to print more money. He believed: more money = more purchasing power = a better economy. But what happened?

The inflation disaster:

• 1980: 1 USD = 0.678 Zimbabwe dollars
• 1997: 1 USD = 10 Zimbabwe dollars
• 2002: 1 USD = 1,000 Zimbabwe dollars
• 2006: 1 USD = 500,000 Zimbabwe dollars
• 2008: Inflation reached 220,000%
• 2009: Inflation exceeded 5 billion percent

Zimbabweans had to drag carts of money to buy a loaf of bread. This is the most cumbersome economic lesson: money is not wealth; it is just a measure. Printing money recklessly is equivalent to printing poverty.

From foreign exchange to inflation — Why do countries have to borrow dollars?

To understand why countries are “forced” to borrow, imagine a village where each family produces a different product:

• The German family makes cars
• The American family makes technology
• The Vietnamese family grows rice
• The French family makes perfume
• The Chinese family makes clothes

Each family needs products from others. But how to pay? Initially, they used gold, but gold was too heavy and hard to divide. A man named America — the strongest, richest, and most trusted — proposed a solution: using his paper money as a medium of exchange. Everyone accepted because they trusted him.

Since then, every international transaction has used US dollars. If Vietnam wants to buy a car from Germany but has no money, they must borrow dollars from lenders (usually international banks), because they cannot print US dollars themselves.

Why does the US have a special status? Because everyone accepts US money. This gives the US a huge economic advantage: they can print money, and the world bears the inflation consequences.

However, this advantage has limits. If the US prints too much money, the dollar will depreciate, causing global inflation, and the US itself will suffer. Therefore, the US only prints money within a level acceptable to the world.

Can the US print unlimited money?

In theory, the US Federal Reserve can print as much money as it wants. But in practice, they cannot do so because:

First: If they print too much, global inflation will spike, devalue the dollar, and ultimately harm the US.

Second: Trust is the foundation of the monetary system. If people doubt that the US is printing too much money, they will abandon the dollar, switching to other currencies, gold, or cryptocurrencies.

The US three-step mechanism:

1. The Federal Reserve prints money
2. The US spends that money on defense, infrastructure, etc.
3. Other countries receive dollars and use them in international transactions, creating a global dollar flow

This means the US can “benefit” from printing money, but not infinitely.

Foreign exchange: The key to economic power

“Foreign exchange reserves in USD” are an extremely important indicator of a country’s economic health. Countries with large dollar reserves can buy goods anywhere without worrying about lack of money.

Currently:

• China leads with about $3.5 trillion
• Japan ranks second with $1.4 trillion
• Switzerland ranks third with $1 trillion

These reserves act as a buffer, allowing countries to weather financial crises — just as China used its foreign exchange reserves to stabilize the global financial market during the 1997 crisis.

In summary, the issue is not that countries cannot print their own money — they can. The problem is that the international currency is not their own. It is the dollar. And only the US has the right to print it. That’s why countries have to borrow in dollars — not because they lack their own money, but because the entire world only accepts the currency issued by the US.