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So for states which have net debt position (including the US), it is to their advantage to have steady price inflation (i.e. currency value steadily being worth
by mishad 8y ago
So for states which have net debt position (including the US), it is to their advantage to have steady price inflation (i.e. currency value steadily being worth less and less in purchasing power), so that the debt is steadily reduced in "real terms" size. And this is in fact exactly what many/most governments seek to do, using a combination of fiscal policy levers, including issuing debt (government bonds) and also measures such as QE.
Note the "steady" in the above - part of the value of a fiat currency is in its price stability (which is linked/coupled to the confidence people have in it and in the issuing government).
In both direction (inflationary Vs deflationary) and in stability, this is markedly different from what is happening with BTC.
- dustingetz 8y agoI think you can factor inflation out of it at the international level; USA wants more things priced in dollars (like oil) because we can manufacture dollars but nobody else can – an enormous edge. Which explains why USA foreign policy is what it is in one sentence.