Leave a Comment

Inflation as Generic Debt Forgiveness
EconLog: Library of Economics and Liberty — Ken Rogoff writes , Price inflation forces creditors to accept repayment in debased currency. Yes, in principle, there should be a way to fix the ills of the financial system without resorting to inflation. Unfortunately, the closer one examines the alternatives, including capital injections for banks and direct help for home mortgage holders, the clearer it becomes that inflation would be a help, not a hindrance. Modern finance has succeeded in creating a default dynamic of such stupefying complexity that it defies standard approaches to debt workouts. I agree that the ...

Rogoff: Embracing Inflation
Economist's View — ... Embracing inflation, by Kenneth Rogoff, guardian.co.uk/Project Syndicate: It is time for the world's major central banks to acknowledge that a sudden burst of moderate inflation would be extremely helpful in unwinding today's epic debt morass. ...

Kenneth Rogoff Embraces Inflation
The Baseline Scenario — ... Right here. I wouldn’t ordinarily just pass along a link you can find elsewhere, but I can’t help remarking that that makes two former chief economists of the IMF to take this position. That was Simon’s old job; his article on the topic is ...

Does not understand Federal Reserve Banking
winterspeak.com — ... They are both exactly right. Taxation is central to generating fiat currency, and controlling inflation. And government has been unable to resist ultimately hyper-inflating fiat currency. The US$ has lost well over 90% of its value over three generations, which is not hyperinflation but it's certainly not a "stable source of value" either. Harvard economists are calling for 6% inflation for two years as if inflation can be turned on, and then turned off so easily. Volker raised interest rates to 20% to stop inflation in the 70s, a feat that seems impossible in the 21st century's ...

Thursday morning links
The Mess That Greenspan Made — ... Falls in London as Dollar Gains Before Decisions on Rates - Bloomberg Harvard Lessons: No place to hide - MarketWatch Dow Will Equal Gold in 2009 - Seeking Alpha ECONOMY Initial jobless claims fall to 1-month low of 509,000 - MarketWatch Calls for $1 Trillion Stimulus Package Grow as Economy Tumbles - Bloomberg The American Crisis and the Case for an Inflationary Depression - Seeking Alpha Embracing inflation - Guardian INTERNATIONAL Bank of England cuts rates from 3 per cent ...

The Case for Inflation
Greg Mankiw's Blog — From Harvard economist Ken Rogoff.

TIPS for China on its dollar problem
FT Alphaville — ... have a beneficial long-term effect in averting the risk of global inflation, say the authors. Furthermore, by substituting TIPS for nominal bonds, the message from the US government would be loud and clear: it is not planning “to inflate its way out of debt”, a fear factor that may already be feeding its way through to long-term Treasury yields. Of course, the above contradicts the other widely held position — that inflation is actually the perfect solution to the current quagmire, a view taken by , among others, Ken Rogoff, former chief economist of the IMF. As he wrote in ...