Mr Khan said:
Kasz216 said:
Mr Khan said:
Governments can only default when they don't control their own currency, or don't have their debt denominated in their own currency. The big players, therefore, are completely immune to default while we remain in a liquidity trap.
|
I don't believe any country has their debt completely denominated in their own currency.
The US for example has about 1 trillion dollars in debt owed in foreign currency.
Which sounds small compaired to the 16 trillion it owes in dollars... but if you start inflting the dollar to pay off that debt... it'd get much higher. So it serves as plenty big enough balance to avoid simply trying to infalte out of the debt.
So the US could totally default.
|
It's not about inflating their way out of debt, more that QE can proceed indefinitely until it works (as in, kicks inflation into gear). Too much would be bad, but it would not be immediately harmful, as opposed to those who call for hyperinflation.
|
obviously we need inflation to be kicked into gear so that the economy can recover. higher prices is a good thing because then businesses will have more money to hire more workers due to the higher prices they are charging for goods. i also believe we can do even better than QE. how about bombing US cities with trillion dollar bills?
surely the aggregate demand line will shift to the right and prosperity will follow.
