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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 387.98+1.3%Nov 28 4:00 PM EST
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To: TobagoJack who wrote (55036)9/15/2009 8:45:01 AM
From: Follies  Read Replies (3) of 218107
 
Throughout the world's financial history, there has never been a case of hyperinflation in a country using a monetary-system based on credit. Hyperinflations only occur in countries that use currency for money. That's an important distinction that cannot be overlooked.
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If the Federal Reserve attempts to mop up excessive government debt by monetizing it, holders of existing debt will readily give their paper to the Federal Reserve at a price that will surely be "above market price". By paying prices above fair-value, the Fed will be swamped with offers to sell, and it will quickly "bankrupt" itself (as any buyer would) by repeatedly paying prices that are too high.

These seem contradictory, besides how can the Fed go bankrupt if it can print money? That happens when the money becomes worthless.
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