Quote:
Originally Posted by Raavak
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Think he is saying if we were still on a gold standard we would be in a deflationary economy.
We are in an inflationary one, and the FED is doing it intentionally, as a part of its job. The theory is that some inflation is good. And since inflation devalues debt expect the inflation rate to go up until the US national debt comes under control.
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It is true that inflation will make paying off debt easier, but with the astronomical amount of debt there is, inflation will have to sky rocket to bring the debt under control, but the debt will be the last thing on anyone's mind when they're paying $100K for a loaf of bread. It's remarkable how many people look at the words $16 Trillion Debt and never stop to think and realize just how huge a number that is.