The ability of any government to pay any amount of money is dependent on how well the economy is doing. If, for example, additional money is printed solely for the sake of meeting increases in salary and there is no corresponding improvements in the economy in terms of increased goods and services or foreign exchange, the printed money would be valueless.

The valueless printed money would drive down the overall value of the Jamaican dollar as there would be far more Jamaican dollars chasing the same amount of goods and services.

High exchange rate

For example, most of what we consume is imported, requiring foreign exchange. At present, the exchange rate is about J$90 to US$1, which means that the Jamaican money supply at this time can only afford to spend $90 for every US dollar. If the supply of Jamaican dollars should increase without a corresponding increase in US dollars to support it, the result will be a shift in the exchange rate as the Jamaican dollar money supply will now be able to afford, for example, J$100 to US$1.

Currently, the US dollar supply is shrinking, which means that it is highly possible that the exchange rate could reach as high as J$110 to US$1.

There will be no winners in such a scenario and the vulnerable, for example pensioners, will lose the most as they cannot strike or demonstrate for an increase in their pension/earning.

I am, etc.,

EVERTON BONNER

etbonner2001@yahoo.com

Morris Meadows

St Catherine