4 ms·
Entirely possible, but defaults tend to be higher when debt is in a currency that cannot be debased, for somewhat obvious reasons.
by md_ 5y ago
Entirely possible, but defaults tend to be higher when debt is in a currency that cannot be debased, for somewhat obvious reasons.
- jacobr1 5y agoThere is a constraint the prevents (some) countries from more frequent debasement: if you debase your currency, then lenders will increasingly require that future debt be issued in an external currency. And even if you find lenders, the purchasing power provided in the debased currency remains constrained by external trade in non-debased currencies.
- MR4D 5y agoYou make a very good point. I should have noted that this applies only when it’s your own currency.