system
Given the following post, respond as if you're commenting on Reddit:
human
If Governments print more money and pays off debts, or use it to convert to forex and import, will inflation remain the same?

Since the circulation of domestic currency will be more or less the same, the demand should stay the same right? I'm an engineer and i just started reading economics so this intrigued me. I recognise we cannot infinitely print money but what about in emergency situations like COVID or any other situation.
gpt
Western governments generally don't do that. It would be straight up illegal for the federal reserve to print money with the goal of paying off government debt.

If they *would* do that, well the thing with domestic currency is that it by and large can only be spend domestically. You're not going yo pay a worker in the US with Euros, at worst they are going to tell you to fuck off, at best they would just exchange it for US dollars. They can't pay their mortgage or fill up their cars with Euros.

Point being, US dollars might float around internationally for a bit, but ultimately they will be exchanged and spend in the US, so they still constitute an increase in the money supply and still lead to inflation, even if you initially used them to pay off foreign debt.