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This might work for long maturity bonds, but debt in the form shorter maturity bonds (0.5 to 5 years) can't really be "inflated away" without destroying the eco
by lottin 5y ago
This might work for long maturity bonds, but debt in the form shorter maturity bonds (0.5 to 5 years) can't really be "inflated away" without destroying the economy in the process.
- ac29 5y agoRight now 5 year US government debt pays less than 1%, with shorter maturities paying less than that. Inflation is always a touchy subject, but I think we can agree that 1%/yr or greater inflation is hardly unimaginable over the next 5 years. https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield https://www.treasury.gov/resource-center/data-chart-center/i...
- lottin 5y agoSure, but for this scheme to work, the increase in inflation has to be unexpected. If the expected real return is too negative, nobody will buy the bonds in the first place.