Default, not HyperinflationSubmitted by jhnmorgan on Wed, 08/15/2012 - 11:09
"The Federal Reserve cannot solve the problem of the 75-year debt which has unfunded liabilities in the present of $222 trillion. There is no way that the government of United States can solve this problem without simply going into default. So, it does not pay the Federal Reserve to adopt a policy of hyperinflation, which is necessary to destroy the debts of the various levels of civil government in the United States."
"The Federal Reserve may go to mass inflation. By mass inflation, I have in mind rates of consumer price increases of 25% or thereabouts. We have never seen this in peacetime America, but it is possible. It will enable Congress to sell some of its rollover debt as this debt matures. The average maturity of the federal debt now is about eight years."
"This does not solve the major problem, which is the unfunded liability of the federal government for long-term old-age retirement programs. The central bank could hyper-inflate for a few years, and enable Congress to kick the can down the road for another three or four years. But this does not solve the fundamental problem facing the federal government, namely, that it has overextended its promises vastly beyond its ability to deliver on these promises."
Full article by Gary North: http://lewrockwell.com/north/north1186.html