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Re: Can we really get hyperinflation when the QE money is …

  • Fri, Dec 10, 2010 - 03:35am

    #27
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    Re: Can we really get hyperinflation when the QE money is …

 

 Re: Can we really get hyperinflation when the QE money is credit..

 http://mises.org/daily/4312

 Assuming the government tries to maintain the unsustainable…  then yes.. it generates the equivalent of cash when it spends funded by monetized debt…

 ok.. there’s a matching (-ve) balance at the FED the governments “overdraft” … but if there’s no limit.. who cares ?

 What’s the difference between a printing press (zimbabwe/weimar)  and an infinite overdraft limit… ( US $ ) ?

 In theory, assuming a mechanism to repay and the genuine intent to… there is a huge difference.

 In practice… sovereign debt is “more honoured in the breach than the observance”.

  A complication…

 the FED itself is happy to provide gigantic amounts of “liquidity” of it’s own volition (apparently). – Was there any treasury consultation or  congressional oversight ?

 So maybe there are possibly two routes to dollar hyperinflation… sovereign initiated (via treasury/congress), and  FED initiated… ?