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View Diary: Economics Daily Digest: Learning to love the platinum coin (26 comments)

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  •  True to a point... (1+ / 0-)
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    glorificus

    Sure, you can print as much money as you want.

    The impact will be, eventually, serious inflation.

    Its why in 3rd world countries someone does just that and milk costs 1 million (units of currency).

    I would argue that we are a long long way from inflationary pressures and that we have about 4-5 trillion to go before that happens - but you are playing with fire.

    What does inflation do?
    1) In small doses, it decreases value of debt, increases things like home equity, etc

    2) The bad - it decreases value of savings and

    3) The bad - everything costs more (duh)

    Pick your poison.  

    In the end - a couple trillion dollar coins used as leverage to not be bullied by Congress won't hurt - but you can't do that forever.

    The object of persecution is persecution. The object of torture is torture. The object of power is power. --George Orwell

    by jgkojak on Tue Jan 08, 2013 at 11:50:26 AM PST

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    •  If the Fed is run by rational human beings (1+ / 0-)
      Recommended by:
      Remillard

      they can pretty much stop inflation in its tracks if they catch it soon enough before it gets out of hand.  Of course that will substantially slow down the economy.  By the way, I do not count the likes of Alan Greenspan as rational human beings.

      "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

      by SueDe on Tue Jan 08, 2013 at 12:13:23 PM PST

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      •  They would raise interest rates (0+ / 0-)

        And yeah- they're too low- but that hurts and pretty much halts the economy in its tracks

        So again, you can do a little of that in the mix, but too much and you end up with what we had in the 80s

        13% interest rates AND inflation

        The object of persecution is persecution. The object of torture is torture. The object of power is power. --George Orwell

        by jgkojak on Tue Jan 08, 2013 at 01:16:22 PM PST

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