Governments are perched atop a mountain of debt, and the question of how to reduce it has become one of the most pressing long-term challenges for the economy. Broadly speaking, there are three ways to deal with debt:
- Default, the least palatable option
- Growth, the most desirable but unlikely
- Inflation, the most likely outcome
Stable inflation expectations: A false comfort?Stable inflation expectations: A false comfort?
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Inflation is really just another form of default, sort of. I guess it depends on what everyone's expectations were.
How many times has the US defaulted on the "dollar"?
I don't recall off the top of my head. I've seen articles where they list them all out.
FDR gold confiscation and revaluation is one
Bretton Woods is another
Nixon suspending gold convertibility is another
And yet multiple politicians have acted like this never happened. Biden is the one that comes to mind first but I know he's not alone.
Huh, good take. Never really saw it like that, kinda feels like a slow, quiet default!
Yeah, but that's only true if the if the bond holders weren't expecting it.
It's probably more accurate to say that inflation above expectation is a form of default.
I immediately think of this music vid when someone says Big Bad Wolf https://www.youtube.com/watch?v=Gch6SY2TA_o
view on www.youtube.com