[quote]Is it realy true that the lenders will stop playing if the US
keeps printing money[/quote]
Lending to whom? No really, if the United States prints money it is bad for two kinds of lenders:
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Those who lend to the US (government debt obligations are in surprise surprise US dollars.) In other words, it is akin to the United States saying to everyone who own United States debt that the ‘debt’ has now been lowered by ‘X%’ where X is the amount monetary printing inflated the dollar.
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Those who lend debt in the United States, or anywhere whereupon the debt is rated in dollars. For the exact same reason as the above.
To put it another way. If you gave your friend $1 to buy coke and then, later, your friend gave you $1 back which bought 1/2 as much coke… would you feel fully repaid? The lenders certainly dont!
History has shown the direct result of high inflation is very high interest rates.
I wouldn’t call myself authoritative. I don’t, after all, have a PH.D in economics. But I’d wouldn’t mind in the least if you quoted me. =)
I have long said that real change will wait until enough Baby Boomers keel over from old age. Though I also blame, in part, all the pro-capitalist anti-communist propaganda we fed ourselves during the cold war. It has horribly distorted our world view and ability to think clearly about economics.
–
Steve