Beyond the obvious: Geldpolitik in Geiselhaft
Amerikas Schulden zwingen die Geldpolitik in den Dienst des Staates, denn Inflation und steigende Vermögenspreise werden zunehmend zur Voraussetzung dafür, dass das System funktioniert.
The liquidation of government debt, a study by Carmen M. Reinhart and M. Belen Sbrancia published in January 2015, explores the combination of inflation, politically or regulatorily pressured interest rates, and the necessity for investors to hold government bonds or lack alternatives. This study explains why nominal repayment does not automatically guarantee the preservation of purchasing power.
A recent categorization distinguishes fiscal dominance from financial repression and provides insight into why inflation can serve as a lasting tool for debt reduction. The combination of these factors makes inflation an effective instrument for debt reduction. In a recent discussion, Luke Gromen from the independent analysis house Forest For The Trees and Daniel Stelter delved into the American government debt, the role of foreign investors, potential consequences for monetary policy, and the hope for increased productivity.
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