Martin Hash wrote:GrumpyCatFace wrote:Martin Hash wrote:The amount of inflation determines everything; less than 50% per month, we’ll probably make it okay. Lot’s of wealthy retired won’t be wealthy anymore but the rest of the population will be just where we left them, relatively so.
LOL no.
If inflation went up 10% in a YEAR, you'd see a giant wave of funds and banks going bankrupt. They're leveraged up to the hilt on debt - car, education, mortage loans.
Most people don’t have much to begin with. I mean, who even has $100K, 10% of the population maybe? Government will keep the presses running printing Unemployment, Welfare & SS checks, enough for folks to live okay anyway. Do that for 3 or 4 years, equalize almost everyone’s income, start over.
That would be nice. But now you're dumping many trillions more magic money directly into the economy. While prices are skyrocketing here, the international value of the dollar plummets, and we can't import anything. Companies shut down, and we default. You can't print enough money for everyone to buy a new truck and a house. Companies can't sell domestically, they can't make money overseas, bankrupt.
If you don't pay at least the interest on the debt, you default. Simple as that. We can't hand someone pretend money as their payment, without the dollar losing value.
So we'll keep printing and printing, swamping the earth with dollars until they're worthless. By then the yield on the 10year note would be something like 80%, and nobody wants it. We default.
This has been done throughout history. It's the natural cycle of central banking. Eventually, the money becomes real, destroys the currency value, and it's over. Then we're Great Britain looking out at our lost empire, and learning Chinese.