I severely doubt that either the UK or the US (to pick the two most obvious candidates) will suffer that fate. But I can easily see a situation whereby a combination of several factors cause inflation to rise well above the levels we have become used to over the last 25 years.

That scenario would be a) a funding crisis caused by bond auction failures, and/or budget deficits getting even further out of hand, leading to falling currencies, pushing up all imported commodities and goods. Followed by b) the failure of central banks to respond to rising inflation as they are scared of killing off any potential economic recovery, and not raising rates and/or reversing QE. Resulting in an inflationary spiral of rising prices feeding through to higher wage claims as in the 1970s.

The longer QE continues the harder it will be to reverse, leading to the obvious conclusion that it might not be reversed at all, leaving all the extra printed cash in the economy, with obvious effects.

The most obvious solution (in the eyes of the government) to massive amounts of debt is to allow inflation to average 8-12% for a number of years. This is would probably not cause riots in the streets , but if maintained for 3-5 years say, would reduce the value of the debt by a third to over a half.

I severely doubt that either the UK or the US (to pick the two most obvious candidates) will suffer that fate. But I can easily see a situation whereby a combination of several factors cause inflation to rise well above the levels we have become used to over the last 25 years.

That scenario would be a) a funding crisis caused by bond auction failures, and/or budget deficits getting even further out of hand, leading to falling currencies, pushing up all imported commodities and goods. Followed by b) the failure of central banks to respond to rising inflation as they are scared of killing off any potential economic recovery, and not raising rates and/or reversing QE. Resulting in an inflationary spiral of rising prices feeding through to higher wage claims as in the 1970s.

The longer QE continues the harder it will be to reverse, leading to the obvious conclusion that it might not be reversed at all, leaving all the extra printed cash in the economy, with obvious effects.

The most obvious solution (in the eyes of the government) to massive amounts of debt is to allow inflation to average 8-12% for a number of years. This is would probably not cause riots in the streets , but if maintained for 3-5 years say, would reduce the value of the debt by a third to over a half.

I severely doubt that either the UK or the US (to pick the two most obvious candidates) will suffer that fate. But I can easily see a situation whereby a combination of several factors cause inflation to rise well above the levels we have become used to over the last 25 years.

That scenario would be a) a funding crisis caused by bond auction failures, and/or budget deficits getting even further out of hand, leading to falling currencies, pushing up all imported commodities and goods. Followed by b) the failure of central banks to respond to rising inflation as they are scared of killing off any potential economic recovery, and not raising rates and/or reversing QE. Resulting in an inflationary spiral of rising prices feeding through to higher wage claims as in the 1970s.

The longer QE continues the harder it will be to reverse, leading to the obvious conclusion that it might not be reversed at all, leaving all the extra printed cash in the economy, with obvious effects.

The most obvious solution (in the eyes of the government) to massive amounts of debt is to allow inflation to average 8-12% for a number of years. This is would probably not cause riots in the streets , but if maintained for 3-5 years say, would reduce the value of the debt by a third to over a half.

If Gold goes to 3000$ like some predict, is it still worthwhile to buy even with CAD?

But the numbers are pretty staggering Dallas Fed estimates America’s unfunded medicare/caid and SS liabilities at $99 trillion. But that’s over a few dozen years, and we still have some useful stuff being produced. So complete dollar annihilation, zimbabwe-style seems unlikely.