Difference between revisions of "Debt monetization"
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'''Debt monetization''' is when the government pays off debt via the process of printing more money to pay its creditors.[http://www.investorwords.com/3099/monetizing_debt.html] Debt monetization leads to [[inflation]].[http://www.investorwords.com/3099/monetizing_debt.html] According to Richard Fisher the President of the Dallas Federal Reserve Bank, "Throughout history what the political class has done is they have turned to the [[central bank]] to print their way out of an unfunded liability.[http://online.wsj.com/article/SB124303024230548323.html] | '''Debt monetization''' is when the government pays off debt via the process of printing more money to pay its creditors.[http://www.investorwords.com/3099/monetizing_debt.html] Debt monetization leads to [[inflation]].[http://www.investorwords.com/3099/monetizing_debt.html] According to Richard Fisher the President of the Dallas Federal Reserve Bank, "Throughout history what the political class has done is they have turned to the [[central bank]] to print their way out of an unfunded liability.[http://online.wsj.com/article/SB124303024230548323.html] | ||
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| + | Monetizing debt is theft on the grand scale.[http://dailyreckoning.com/monetizing-debt-the-grandest-of-larcenies/] Rather than a government repaying what it has borrowed, when a government monetizes debt the a government merely prints up extra currency and uses it to pay its loans.[http://dailyreckoning.com/monetizing-debt-the-grandest-of-larcenies/] When a government debt monetized is it is transformed into an increase in the money supply, thereby lowering the purchasing power of everybody’s savings.[http://dailyreckoning.com/monetizing-debt-the-grandest-of-larcenies/] | ||
== External links == | == External links == | ||
Revision as of 02:57, August 16, 2009
Debt monetization is when the government pays off debt via the process of printing more money to pay its creditors.[1] Debt monetization leads to inflation.[2] According to Richard Fisher the President of the Dallas Federal Reserve Bank, "Throughout history what the political class has done is they have turned to the central bank to print their way out of an unfunded liability.[3]
Monetizing debt is theft on the grand scale.[4] Rather than a government repaying what it has borrowed, when a government monetizes debt the a government merely prints up extra currency and uses it to pay its loans.[5] When a government debt monetized is it is transformed into an increase in the money supply, thereby lowering the purchasing power of everybody’s savings.[6]