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Seems irrelevant because like any country with a sovereign currency they can just print more money if they want to. It's a much bigger problem if you have debt
by xyzzy4 11y ago
Seems irrelevant because like any country with a sovereign currency they can just print more money if they want to. It's a much bigger problem if you have debt and can't print your way out of it (for example Greece).
- ktRolster 11y ago"Printing your way out" isn't really a solution, either.....Zimbabwe tried that for a while, but gave up after inflation hit 80 billion percent per month. Prices would literally go up two or three times a day. If you had Zimbabwe dollars, you would try to get rid of them as fast as possible, either by exchanging them on the black market, or by buying something. If you waited until the next day, you would lose a lot of money.
- vkou 11y agoHyperinflation (Especially unrealiable hyperinflation) is an untenable state of affairs. Nobody lends, hedging is impossible, and cash becomes worthless. Moderate amounts of inflation (Under 10%), on the other hand, has worked 'fine' for the better part of a century.
- Laforet 11y agoPrinting money is not the only option, governments can devalue their currency instead and China is already doing it. Greece, of course, has none of these options.