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wrong, numskull, that is exactly what is says in my OP.
wrong, numskull, that is exactly what is says in my OP.
Your OP shows hyperinflation in Zimbabwe, and makes a baseless claim that it will happen in the United States. The economic problems in the United States are not inflation, they are in wealth redistribution (though not in the way that you would invoke it), and the demise of the small business market, among other things.
However, it isn't because spending money like there's no tomorrow is how you get to hyper-inflation.
However, it isn't because spending money like there's no tomorrow is how you get to hyper-inflation.
No, that's how you get debt.
Governments never pay off their debt. They always monetize it.
That leads directly to hyperinflation.
Governments never pay off their debt. They always monetize it.
No more than any other entity.
That leads directly to hyperinflation.
No, that's ridiculous and completely unfounded.
Horseshit. Most individuals and most private firms pay their debts.
That's the historical record, numb nuts.
Horseshit. Most individuals and most private firms pay their debts.
Where did I say they don't? You seem to think that paying debt is incompatible with monetizing debt. If you borrow $100,000 to start a business, aren't you monetizing that debt? Don't you have to recoup that debt, plus more, in order for your business to be successful?
Let's say that I currently have $50,000 invested with T Rowe Price or some similar company. I get an average yearly return of at least 12 percent. My car reaches its final leg and I need to buy a new one. I pick something out that will cost $25,000. Now, I could easily pull money out of my investments and write a check for the 25 large. But the better option would be to take out a car loan and pay 5% interest on the loan. That way, I can keep the $25k invested, and returning 12% or more to me. By doing so, I'm monetizing the car loan, allowing me to make more money than if I hadn't taken out the loan. I can make every single payment on time and repay every penny, but I'm still monetizing my debt.
The government is monetizing debt in pretty much the same way. Government spending contributes to economic growth, but comes at the cost of the need to repay the debt with accrued interest. Currently, economic growth outpaces the rate of interest, thus creating the phenomenon of negative interest. It's a net gain for the American economy.
That's the historical record, numb nuts.
No it's not. And you can't provide any evidence to that fact. Because it's absurd.
Debt does not lead directly to inflation. That's not to say that there is no link whatsoever between debt and inflation. But to say that debt directly leads to hyperinflation is absurd. If that were true, then every country in the world would have been gripped by irreversible hyperinflation decades ago.
Governments monetize their debts when they pay them off by printing money. Corporations and private individuals can't print money. They go to prison if they try.
Of course I can prove it. Just consider the hyperinflation in Weimar German in 1923. It occurred because Germany tried t pay off its war debt by printing money.
Governments monetize their debts when they pay them off by printing money. Corporations and private individuals can't print money. They go to prison if they try.
Let's keep on topic, shall we? In the United States, currency is introduced into circulation in accordance with statutory regulations that dictate responses to public demand.
Of course I can prove it. Just consider the hyperinflation in Weimar German in 1923. It occurred because Germany tried t pay off its war debt by printing money.
That is not a direct cause, it is a proximate cause.
Central bank governor John Mangudya said the cash, known as bond notes, will be backed by $200m (£140m) support from the Africa Export-Import Bank. The specially-designed two, five, 10 and 20 dollar notes will have the same value as their US dollar equivalents. Zimbabwe introduced the US dollar after ditching its own currency in 2009 following sustained hyperinflation. Since then Zimbabweans have been using the dollar as well as a number of other foreign currencies including the South African rand and the Chinese yuan.
Zimbabwe dollar note
But the BBC's Brian Hungwe in the capital, Harare, says that bank customers are not always able to withdraw the amount of US dollars they want because of a shortage of dollar notes in Zimbabwe. The governor stressed that the issuing of bond notes was not the first step on the way to reintroducing the defunct currency, the Zimbabwe Herald newspaper reports. Mr Mangudya also introduced a number of other measures to steer people away from using US dollar cash. This includes setting a $1,000 limit on how much cash can be taken out of the country. He wants to encourage people to make greater use of the rand since a large portion of Zimbabwe's trade is with South Africa.
But our correspondent says that people are reluctant to hold rands as they are not confident that the currency will maintain its value against the dollar. He adds that not all shops and traders accept the full range of currencies officially in use. The central bank brought in so-called bond coins of one, five, 10 and 25 cents, pegged to the US dollar, in 2014. Mr Mangudya said the bank was still working on a design for the new notes, but they should be in circulation "within the next two months", the Herald reports.
Zimbabwe to print own version of US dollar - BBC News
This week, Zimbabwe's central bank imposed measures in an attempt to ease the cash crunch, which reflects the country's dire economic situation. The measures include reducing the amount of money that travelers can take outside the country and limiting daily cash withdrawals.
Long lines are frequent outside banks, where tellers limit daily withdrawals to $200.
Since Zimbabwe's currency collapsed in 2009, the country has officially used nine currencies, including the U.S. dollar, the euro, the South African rand, the Indian rupee, the British pound and the Chinese yuan. In practice, the U.S. dollar is the de facto official currency.
News from The Associated Press
Governments monetize their debts when they pay them off by printing money. Corporations and private individuals can't print money. They go to prison if they try.
Let's keep on topic, shall we? In the United States, currency is introduced into circulation in accordance with statutory regulations that dictate responses to public demand.
ROFL! I can't tell you how naive that makes you look. The Fed can increase the money supply anytime it wants at the stroke of a pen. What do you think QE1, QE2 and QE3 were?
