> Well, you're right, tight monetary policy would kill the economy, very briefly. It would force liquidation of debt.
Indeed! Now think that the USD and its debts is not just America's home currency, but the world's "reserves", even "savings" for a rainy day.
So I'd strongly doubt the "briefly" part when the whole world is forced into a "liquidation" (you mean settling?) of debt.
Who can untangle the planetary debt webs? No flavour of monetary policy can do that, whether it's coming from US soil or global institutions. Can it ever be repaid in "real terms"? If it is clear that it cannot, the best they can do is to allow for nominal "debt-service performance". The banks demand it, simply because the depositors, pension funds, insurances, billions of people implicitly expect "at the very least that".
So you print. Doesn't matter whether the figure-head is Bernanke or Greenspan or Volcker or Yoda. Doesn't matter what Zoho's CEO thinks of this or ZeroHedge. Knowing the "hard place" that needs to be avoided, we cling to the "rock" for as long as possible. That is, as long as the entire planet happily soaks up all the fresh shiny USD coming out of the presses.
Indeed! Now think that the USD and its debts is not just America's home currency, but the world's "reserves", even "savings" for a rainy day.
So I'd strongly doubt the "briefly" part when the whole world is forced into a "liquidation" (you mean settling?) of debt.
Who can untangle the planetary debt webs? No flavour of monetary policy can do that, whether it's coming from US soil or global institutions. Can it ever be repaid in "real terms"? If it is clear that it cannot, the best they can do is to allow for nominal "debt-service performance". The banks demand it, simply because the depositors, pension funds, insurances, billions of people implicitly expect "at the very least that".
So you print. Doesn't matter whether the figure-head is Bernanke or Greenspan or Volcker or Yoda. Doesn't matter what Zoho's CEO thinks of this or ZeroHedge. Knowing the "hard place" that needs to be avoided, we cling to the "rock" for as long as possible. That is, as long as the entire planet happily soaks up all the fresh shiny USD coming out of the presses.