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I've seen this idea expressed on HN a few times recently. I don't get it. The mechanics are really not that different from any other country. If you print billi
by spywaregorilla 4y ago
I've seen this idea expressed on HN a few times recently. I don't get it. The mechanics are really not that different from any other country. If you print billions to bail out entities you get rapid inflation. The big things at risk are real estate prices and local governments. You can't easily wave this away regardless of your level of control.
- Overtonwindow 4y agoWhat would stop a country with full control from simply printing money and saying "inflation? What inflation?" Where will the cracks show and how will they show?
- spywaregorilla 4y agoThink about what inflation is. Does the US make inflation real by acknowledging it? Or is it there even if we don't recognize it? The cracks appear the same everywhere. You have large debts that need to be paid. You want to exchange cash for value. If you suddenly instantiate cash in large quantities to pay those debts, the ratio of cash:value suddenly gets a lot bigger. People start saying "hey, I was saving $10 bills in my wallet, and now everyone's passing around $1000 bills, what's up with that?" (hyperbolic and illustrative). Foreign entities taking your local currency start saying "hey, if you're gonna keep printing this stuff, I'm gonna need more of it to stay ahead of the curve and get 'my share'". Everyone needs to nudge up prices a little bit because they buy from others who raised prices, and that means labor prices need to rise. etc. etc. When it is easier to get ahold of currency, the "value" of the currency goes down. If you're not producing increasingly more valuable stuff to offset that, it starts to mean prices rise.