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To: Hank Stamper who wrote (3212)2/6/1999 6:42:00 AM
From: Boca_PETE  Respond to of 15132
 
David T: RE:< What does "monetize debt" mean >

Governments monetize debt by BUYING GOVERNMENT SECURITIES in exchange FOR MONEY (currency - the shortest term debt there is) - thus the supply of money is increased, demand is increased, and the economy grows. The big danger with monetizing debt too much is inflation (rising prices - too much money chasing too few goods and services). However in Japan, such monetization could have the effect of reducing the current deflation (falling prices) in that country.

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