If you wanted to teach the lesson that overspending is bad, you’d deflate. The pain of debt repayment is proportionate to (Interest rate – inflation rate). So increase interest rates and/or deflate, not inflate.
They have been trying to inflate for over a year now with no luck. Then after EVERYTHING failing that they have tried, they started buying our own debt to keep interest rates down. Which is inflationary, but really does not solve a thing except to keep rates down for an ever dwindling pool of buyers to buy over priced assets. This does not stop the job and wage deflation which is the problem. This did however catch the attention of the world and made them lose faith as apparent by all the jawboning about finding another currency. Ok, but we are still deflating. So what is next? Buy more debt? When is this inflation coming that you are talking about? How is printing money to buy debt going to solve the massive credit contraction going on that is causing the job and wage deflation? Which has a negative multiplier effect. Do you see the problem? They are impotent. They have no more tools and the problem is too much debt. The are in a sense, insane.
Now, Hyperinflation is a currency event due to non-confidence in the implied economy vis-a-vis it’s currency. All past hyperinflations have started in the trough of a deflationary trend. Wiemar actually had two troughs, a double bottom, and then it was a hockey stick to irrelevancy. Hyperinflations are actually better termed hyperdevaluations. Which is the obvious next step when the world gives up on the US.
All they are doing is pouring gas on a fire and the only OBVIOUS conclusion is destruction of the currency via no confidence.
Why? Because you cannot inflate your way out of a deflationary depression caused by too much lending.
