3 ms·
Could you explain more, or provide a link?
by gregw134 6y ago
Could you explain more, or provide a link?
- DennisP 6y agoLet's say your currency is marks and you owe dollars to foreign investors. You have trouble paying so you print more marks. The marks devalue relative to your debt, making it even harder to pay off, requiring even more printing. Now say your currency is dollars and you owe debt in dollars. If you print more dollars, they devalue, but the value of your debt goes down right along with your currency. It's bad for the lenders and you might have to promise more interest to borrow more, but you don't spiral into oblivion just trying to pay off your existing debt.