In yet another home run from Ellen Brown, her article in the Huffington Post nails what the "Deficit Terrorists" have wrought in Britain.
She mentions the phony specter of hyperinflation. Everybody “knows” that Germany's post-WWI hyperinflation and the eventual worthlessness of the US Continental both resulted from government "printing too much money." But it just ain’t so. The German government turned the central bank over to private interests who then ruined the German Mark with hyperinflation. The Mark was rescued only when the government finally reclaimed sole power to issue money. The Continental was ruined deliberately by counterfeits the British printed by the bushel in Manhattan, not by Congress over-issuing them.
So suppose that both Britain and the US each handled their national debt not by counter-productive “belt tightening” but simply by printing money to pay it off. All of it. What would happen? Hyperinflation? Not at all.
Ellen notes that the total U.S. money supply is about $13 trillion—thus more than the approximately $11 trillion of national debt, whose escalation is scaring everybody. So printing Greenbacks to pay off the national debt in total wouldn’t even double the money supply. Inflationary? Yes, at a time when the government is trying mightily and unsuccessfully to induce some inflation to counter the deflation now hurting the economy. Maximum inflation would occur in the unlikely event that former bond holders simply spent all the money used to pay down the debt rather than re-investing any of it. The value of the dollar (and debts held in dollars) might then experience a one-time devaluation of about 30 to 40%, or about six years of the “normal” devaluation of 5% per annum.
Would that be hyperinflationary? No, not by a long shot.
But the national debt—and the interest we and our grandchildren have to pay on it—would be gone forever.
How’s them apples?