monetize?

[David Bergdahl]

--On Friday, March 21, 2003 8:38 AM -0500 "Bethany K. Dumas"
<dumasb at UTKUX.UTCC.UTK.EDU> wrote:

> On Fri, 21 Mar 2003, David Bergdahl wrote:
>
>> Historical usage: "monetize the debt," i.e. inflate it away
>
> Thanks - I'm not sure exactly what that means -  how does one "inflate
> debt away"?
>
> Bethany

Pay the debt off in inflated dollars.  In Carter's hyperinflation, for
instance, you could borrow money at 15.75% (as I did for a mortgage) and
get 18% on a money market fund.  Inflation devalues the currency faster
than debt service can recover it--so the debt is repaid in ever-cheaper
dollars.

_________________________________________
"Practice random acts of intelligence and senseless acts of self-control"