From Financial Sense
''Regardless of the insidious wealth transfer it engenders, artificial
reflation can be difficult to engineer when faced with such a huge
accumulated debt, as so-called ‘balance sheet effects’—debt
write-downs—can overwhelm ‘income effects’ the rising nominal incomes
associated with inflation. There is, however, one method that trumps all
others: Currency devaluation.[4] Yes, this may
clearly and directly rob savers (and importers) to bail-out borrowers
(and exporters), but if other methods fail, then devaluation will ensure
a de-leveraging of the economy. It will also make it poorer overall,
but the borrowers, being bailed-out in the process, avoid bankruptcy and
thus are naturally all for it. Who cares if the pie shrinks a bit if
your slice increases disproportionately in size? Such is the attitude of
an established, self-serving elite.''
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