It's not merely interest payments. Ben's idea it to reflate
asset and housing markets in devalued dollars, so that
insolvency that plagues the economy, or, more precisely,
the banking system, is "cured" and debt
including government debt is repaid in devalued dollars.
We will all pay higher prices as a result, of course, and
if he keeps printing, banks and brokers will make out
like bandits on rising asset prices without any real
economic growth. Speculation will prosper, real economy
will continue to collapse. It has been in decline since the
late 90-s. You can make money on inflation, but it is
far more profitable to speculate than to engage in productive
economic activity. This dynamics leads to continued
economic slump, if not a protracted inflationary depression.
In other words, again, debtors will find it hard to repay
debt when prices for food and gas are soaring, consumption
will decline. In the end, once the credit bubble burst,
there is simply no quick fix for the economic slump, print
or not. That despite Ben's Ph.D. thesis and distinguished
academic career -vbg- |
