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View Full Version : Can inflation help the debt?




Matt Collins
02-16-2011, 05:05 PM
Can we use inflation to pay down our debt with cheap dollars?
or
Why Do People Believe in the Asset Bubble Fairy?










http://www.youtube.com/watch?v=vluaR6QpNtw&feature=uploademail

Danke
02-16-2011, 05:10 PM
Nice. Good one Matt.

Zippyjuan
02-16-2011, 05:56 PM
China has only about five percent of our debt- not most of it.

Higher infilation will also inflate the deficit (though not as much as the prices of goods and services). Inflation is a component of interest rates so higher inflation will mean higher intrest rates which means that interest on the debt will cost more. If you inflate, your debt still does not go away. If you were $14 trillion in debt before the inflation and you do nothing to pay down that debt, you still owe $14 trillion (plus interest).

Matt Collins
02-17-2011, 11:12 AM
You wouldn't believe how many neocons think that we can simply outpace the debt by inflating the monetary supply.

tangent4ronpaul
02-17-2011, 11:25 AM
That is a neocon position. The project for a new American century put out a report advocating exactly that. The big problem is that you screw the population while bailing out the government.

-t

sailingaway
02-17-2011, 11:35 AM
My understanding is that mid last year the Fed started giving government fund bond buyers 'protection' on inflation. I am not sure what form this took but I remember thinking "gee, I bet the teacher pension plans don't get those terms...."

Travlyr
02-17-2011, 11:52 AM
It seems like debtors in Zimbabwe should have easily been able to extinguish their debt with their trillion$ of play money.

LinusVanPelt
02-17-2011, 11:59 AM
It seems like debtors in Zimbabwe should have easily been able to extinguish their debt with their trillion$ of play money.

Peope claim that we will be able to get away with it because our currency is "not denominated in foreign dollars." I just went several rounds with somebody on another website over this issue recently. But honestly you can only reason so much with anyone who seriously thinks that hyperinflation could ever be an overall good under any conditions. Such folks are either excruciatingly ignorant or just intentionally malevolent.

tangent4ronpaul
02-17-2011, 11:59 AM
My understanding is that mid last year the Fed started giving government fund bond buyers 'protection' on inflation. I am not sure what form this took but I remember thinking "gee, I bet the teacher pension plans don't get those terms...."

There was an article (not here) yesterday about the FED considering stopping the sale of bonds. I just caught the headline and didn't read the article.

Travlyr
02-17-2011, 12:06 PM
Peope claim that we will be able to get away with it because our currency is "not denominated in foreign dollars." I just went several rounds with somebody on another website over this issue recently. But honestly you can only reason so much with anyone who seriously thinks that hyperinflation could ever be an overall good under any conditions. Such folks are either excruciatingly ignorant or just intentionally malevolent.

Schools have not done a very good job at educating people. TV does even worse.