3 ms·

Intentionally inflating a currency to pay down debt is effectively a de facto partial default, even if it's not de jure.

• boroboro4 1y ago
  But what if most of the world currencies have the same issue? Will this de facto partial default as bad then?
  • scoofy 1y ago
    What if? Sure, but there is little reason to expect that to happen.
  • s1artibartfast 1y ago
    Then you see the collapse of the global economic system as credit crashes and nobody can effectively transact business. If you cant trust a currency, you have to revert to much more cumbersome and limiting contracts. e.g. loaning cash today to be repaid in gold tomorrow. Furthermore, the undesirability of a currency severely limits the ability of governments to maintain economic stability.