Caltorguy

Attention Gold Bugs: Hyperinflation or Deflation?

Isn't one way to "pay" off debt to inflate your way out of it? In contrast, if the Fed allows deflation to happen, won't the already huge US debt become crippling, well north of the 100% of GDP benchmark where things start to get pretty tough, and lenders start to worry? Same for corporate debt. Maybe what we should be looking at is not the 1930s but 1923...in Germany when that country essentially eliminated its war debt through inflation in the billions of %. The only people that made it through that period were those that held gold or foreign currency (which wasn't that easy to get). As for the US in 2009, trillion dollar deficits, or 7-8% of GDP don't lend themselves well to deflation.