On 7/10/2010 3:22 AM, Keith Hudson wrote:
They're in paralysis at the moment but, in desperation, they'll
probably choose the Krugman route. This is probably the better route
because it will bring about hyperinflation, and then sensible
currencies, all the quicker.
Keith
Japan has tried it for 20 years with little success. Their debt to GDP
is around double the US rate, yet interest rates are zero at spot and 1%
longer term. As they say: you can lead a horse to water...and you can't
push on a rope. Of course if the US issues a million dollars to every
citizen as a gift (not via borrowing, just by decree), then inflation
would jump...due to a sudden halving of the $US value. Within days, its
buying power would drop likewise. If the US borrows the money, the
devaluation will just take longer.
Steve
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