Quote from: johnyj on February 27, 2015, 04:01:15 PM

Quote from: lyth0s on February 17, 2015, 05:02:57 AM

I don't think I agree with this. If the $100 is printed and we now owe $102 to the fed, then we have even more money printed to pay our debts back and this cycle repeats. Yes debt forever increases (and at a faster rate than the money supply), but all of this printing leads to inflation (dollar becomes cheaper and it takes more of them to buy the same good)...It's only if we stop printing that we would start to have deflation and economic collapse.

Please tell me if I'm wrong or missing something.

Printing does not necessary leads to inflation, since the inflation indicator does not include capital goods, more money will just raise the asset price and bond price. And now more money means more debt, means more of the income will be used to pay the debt, and less money will be used to pay the daily consumption, so there will be deflation even the money printing is accelerating

Of course when banks receive the interest, they will spend, which put those interest money back into circulation, but their spending is very limited and could not create much jobb

I'm starting to see your point. But if asset prices rise, is that not inflation as seen by the consumer? Is it possible for the government to be undergoing deflation in paying the interest while at the same time the rest of the consumer market sees inflation of prices?