4 ms·

Primarily because that scenario ignores the realities of hyperinflation. Default is bad, but hyperinflation destroys nations.

youainti 4y ago
More specifically, I don't know of an exception to the rule that sustained hyperinflation and economic decay go together.
- jfengel 4y ago
  Hyperinflation happens only when you've already got economic decay -- in fact, economic collapse. Hyperinflation is the symptom, not the cause. Hyperinflation isn't numbers like 10% annual inflation, which are extreme events in functioning economies. Some definitions put it at more like 10,000%. That's not caused by central bank manipulation. That's caused by a complete collapse of the economy. The central bank can try to deal with that by printing almost-valueless currency as an IOU, but that's the result, not the cause. That's often caused by war, though it's sometimes caused by massive mismanagement of resources. It's not really relevant to the kinds of situations being discussed in the article, which are functioning economies (as long as they can keep from going to war on each other).
spywaregorilla 4y ago
Hyperinflation is not on the table for the scale of money printing required to continue paying foreign owned debts.
- angrycontrarian 4y ago
  Do you have a source to back up that claim?
  - spywaregorilla 4y ago
    China has a bit less than a trillion dollars in US debt, down about $100B over the past year and expected to shrink. If the US can't source a trillion dollars something has gone very wrong.
    - angrycontrarian 4y ago
      Where's the citation that printing away the debt won't cause inflation? I can't find it in your post.
      - spywaregorilla 4y ago
        I'm asking you to use your brain and critical reasoning skills buddy. Also > won't cause inflation won't cause HYPERinflation
        angrycontrarian 4y ago
        Extraordinary claims require extraordinary evidence. The claim that printing away 127% debt-to-GDP won't lead to hyperinflation is very extraordinary, and yet you still haven't posted evidence from an authoritative source.
        spywaregorilla 4y ago
        > The claim that printing away 127% debt-to-GDP won't lead to hyperinflation is very extraordinary That's not the claim. Government bonds are like 30 years, so it's not 127% of the GDP all at once. Second, the context was not all debt everywhere, it was Chinese held debt, which is at about 5% of GDP, without spreading it across the duration of the bonds. > you still haven't posted evidence from an authoritative source. https://www.theonion.com/fed-raises-interest-rates-in-effort-to-hey-pay-attenti-1849072556 https://www.theonion.com/fed-raises-interest-rates-in-effort...
        angrycontrarian 4y ago
conanbatt 4y ago
defaulting is worse than inflation. It means some people get 0 - whereas inflation spreads the pain. Source: Argentina.

youainti 4y ago

More specifically, I don't know of an exception to the rule that sustained hyperinflation and economic decay go together.

jfengel 4y ago
Hyperinflation happens only when you've already got economic decay -- in fact, economic collapse. Hyperinflation is the symptom, not the cause. Hyperinflation isn't numbers like 10% annual inflation, which are extreme events in functioning economies. Some definitions put it at more like 10,000%. That's not caused by central bank manipulation. That's caused by a complete collapse of the economy. The central bank can try to deal with that by printing almost-valueless currency as an IOU, but that's the result, not the cause. That's often caused by war, though it's sometimes caused by massive mismanagement of resources. It's not really relevant to the kinds of situations being discussed in the article, which are functioning economies (as long as they can keep from going to war on each other).

spywaregorilla 4y ago

Hyperinflation is not on the table for the scale of money printing required to continue paying foreign owned debts.

angrycontrarian 4y ago
Do you have a source to back up that claim?
- spywaregorilla 4y ago
  China has a bit less than a trillion dollars in US debt, down about $100B over the past year and expected to shrink. If the US can't source a trillion dollars something has gone very wrong.
  - angrycontrarian 4y ago
    Where's the citation that printing away the debt won't cause inflation? I can't find it in your post.
    - spywaregorilla 4y ago
      I'm asking you to use your brain and critical reasoning skills buddy. Also > won't cause inflation won't cause HYPERinflation
      - angrycontrarian 4y ago
        Extraordinary claims require extraordinary evidence. The claim that printing away 127% debt-to-GDP won't lead to hyperinflation is very extraordinary, and yet you still haven't posted evidence from an authoritative source.
        spywaregorilla 4y ago
        > The claim that printing away 127% debt-to-GDP won't lead to hyperinflation is very extraordinary That's not the claim. Government bonds are like 30 years, so it's not 127% of the GDP all at once. Second, the context was not all debt everywhere, it was Chinese held debt, which is at about 5% of GDP, without spreading it across the duration of the bonds. > you still haven't posted evidence from an authoritative source. https://www.theonion.com/fed-raises-interest-rates-in-effort-to-hey-pay-attenti-1849072556 https://www.theonion.com/fed-raises-interest-rates-in-effort...
        angrycontrarian 4y ago

conanbatt 4y ago

defaulting is worse than inflation. It means some people get 0 - whereas inflation spreads the pain. Source: Argentina.