The pseudonym "Philo Vaihinger" has been abandoned. All posts have been and are written by me, Joseph Auclair.

Thursday, January 10, 2013

The inflation option?



If it’s such a great idea why don’t they just do it regardless of whether the congress raises the debt ceiling?

What the hell, at a stroke the government is a trillion dollars richer.

So why not?

Because it’s a fantastically stupid idea and we’d better hope the White House isn’t as crazy as the Republicans are or the Democrats are (one hopes) pretending to be.

Effectively dumping a trillion dollars on the money supply in a single shot in order to pay your debts is not far from what the Germans did to pay off the allies after WW1.


Totally wiped out everybody’s savings and drove up prices by orders of magnitude until cash and monetary holdings became virtually worthless.

People on fixed incomes had, effectively, no incomes and were forced to sell off assets.

Kiss your retirement nest-egg and the house you spent a lifetime paying for good-bye.

Or maybe not.

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