Originally Posted by clr8ter
How can the verdict be out on that? We were stupid with our money, which was borrowed in the 1st place, and as a result we are up to our eyeballs in debt. So now, we print MORE money, to "pay off" our debts, and in the process create inflation, so people can't afford what they used to. And, what happens if the people getting paid off in this inflated currency say "NO, sorry, not going to accept that."? Sounds to me like the verdict is in.....
Well, it has a little something to do with fiat money and notional value.
If I told you that instead of giving you tangible assets in return for a debt that I owed you, I would give you coupons to my store and that you could only redeem the coupons at my store, would you "buy" my debt? That's essentially what the US Federal Reserve has done. There are still no shortage of buyers.
If people were no longer willing to accept the coupons or our coupons were not considered the "best" coupons to have, then we'd have a real problem. We're seeing a little of that, but the US Dollar is still the world's reserve currency and people are still spending money like mad in all countries. So, the "system" would appear to still be feasible.
As of yet, nobody wants the "alternatives" to this system.
And yes, our leaders were stupid with our money.