Monday, May 09, 2016

Trump's Plan for Hyperinflation

Hungary (1946), when money was trash.
Donald Trump today announced his plan to reduce the American debt through hyperinflation.

Previously, he had proposed to pay off the debt through giving bondholders "haircuts." Rather than paying the full value of the bonds he would "negotiate" deals where bondholders would be forced to accept partial payments for the debts they hold.

In simple financial terms, that would be declaring bankruptcy and defaulting on the debt or, as Trump called it, "playing with debt."

That didn't go over too well with the global financial market.
A ten billion mark German postage stamp, worth about 50 cents.
Trump's new plan is to make every American a billionaire by inflating the currency so the US debt is nearly worthless, making it easy to pay off. Because that worked so well in 1920's Germany and modern Zimbabwe.

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