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To: Mike M2 who wrote (46312)	12/11/2000 6:13:54 PM
From: eddieww	Respond to of 436258

"...attempts to inflate away our debts to foreigners may precipitate a severe decline in the value of the dollar causing price inflation for imports and perhaps higher interest rates for a while until debt deflation takes hold." Yes, that's exactly my point. We'd be able to pay our massive foreign debts at a huge discount, stimulate our own economy, especially our exports, and avoid a depression/severe recession at the cost of wage and price inflation at home. The key benefit would be discounting the foreign debt, and the downside would be that wages may fall a bit behind prices, although with unemployment as low as it is that is not a given. Foreigners who have "vendor financed" our capex for the past several years would be the bagholders and there wouldn't be anything they could do about it. At least, nothing I've heard yet. -g-