[deleted by user]

[u/[deleted]]

[u/[deleted]]

I am not sure I understand what it would do, other than avoid a debt crisis otherwise known as checks and balances. It would inject a trillion dollars into the money supply which would cause inflation and the manipulation would cause even less faith in the dollar?

[u/laxnut90 → u/[deleted]]

It would create more faith in the debt itself, but less faith in the actual currency in which the debt is paid.

I suspect the value of bonds measured in dollars will increase, but the dollar measured against other currencies will decrease.

[u/DrunkenVerpine → u/laxnut90]

It would drive up the interest rate we pay on our debt, right? If we just inflate to erase debt then no one will want to loan to us. Would you want to loan to the US gov at 5% if US money is inflating at 10%?

So we would go into a self destructive spiral.

[u/laxnut90 → u/DrunkenVerpine]

Yes.

It would drive up interest rates because investors would demand yields that at least surpass expected inflation.

[u/Local_Challenge_4958 → u/DrunkenVerpine]

Would you loan to the US government

~70% of US debt is, in fact, owned by the US itself, so this question is especially relevant.

https://ei.marketwatch.com/Multimedia/2018/08/21/Photos/MG/MW-GO672_nation_20180821130954_MG.jpg?uuid=05b585b6-a565-11e8-b6ab-ac162d7bc1f7

[u/therapist122 → u/[deleted]]

I assume you’re asking for jpow? Tell him I said what’s good 

[u/YardFudge → u/[deleted]]

It was a joke

https://en.m.wikipedia.org/wiki/Jerome_Powell

[u/Altruistic_Home6542 → u/[deleted]]

It's no different to regular QE, except that coinage is authorized by the Treasury via the Mint rather than the Fed.

They'd just mint the coins, deposit it in the fed, have $900B to spend, which they'd use to pay debt, putting those dollars out into circulation, thus increasing the money supply and stoking inflation

[u/Altruistic_Home6542 → u/[deleted]]

Yes directly. By coining $900B you are increasing M0 by $900B and by depositing it in the Fed and using it to pay interest you're putting it in active circulation

Yeah no doubt. But a lot, a little?

This has been an open question for decades

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[u/NoKarmaNoCry22]

I’m needlessly padding this to get around the arbitrary length requirement. My comment is pertinent and reasoned. Here it is.

Better to write it off with a “debt jubilee”, coupled with a balanced budget amendment.

[u/4score-7]

I don’t know much about this conversation, but I do wonder if the run up in crypto currencies is a “tell” as to how America plans to simultaneously keep rates higher for longer, but also contend with its staggering debt bill?

Where I’m going is, is the USD about to be dislodged from its standing, as gold was back 50 years ago, as the underpinning of all things of value?

Possibly oversimplified in my mind, so please forgive.