Re:Consumer Prices in U.S. Increase by Most Since 2009
by csomar on Wednesday May 12, 2021 @02:46PM
(#27133735)
Isn't it why Japan, Europe and now the USA have 0/negative rates? The government literally makes money to borrow money. They can't default with negative or zero rates. They are basically being bailed out by the "economy".
It's sensible to be afraid of hyper-inflation. At some point the economic actors are going to be fed up with it and off-load their investments.
Re:Consumer Prices in U.S. Increase by Most Since 2009
by omginternets on Thursday May 13, 2021 @11:55AM
(#27143581)
>The reason it is so feared is because it's next to impossible to contain once it starts without causing massive economic hardship.
What's the process for containing inflation, and what's its mechanism of action?
In fact, the Fed could likely do next to nothing about inflation with our country's current debt levels.
Even at a historically average rate of 8%, our federal government would either go bankrupt, cut most spending, or massively raise taxes, causing a severe economic retraction. (Our $26T in debt would require half of the entire federal budget to service our debt at such rates.)
Many of our largest corporations would also fold, unable to service their massive debts. It'd be a disaster.
That's why people fear runaway inflation, even if it hasn't been a problem for several decades. Once you can identify it as a problem, it's too late.