Quote:
Originally Posted by Tinordi
most concerning about deflation is that there are no levers to pull to counteract it
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I think inflation will return in a big way at some point with the significant amounts of liquidity in the financial system thanks to the central banks buying bonds and at the moment much of that is sitting on US banks balance sheets waiting to be loaned out. Once it is loaned out there will be inflation.
Debt-laden governments encourage higher inflation, as that makes paying back what they owe easier. The higher the inflation the easier it is to pay back debts because revenue will be pushed up by the higher inflation while the amount owed stays the same. Monetizing debts = inflation.