08 January 2010

Government incentives to inflate debt away

Two interesting quotes caught my eye in a recent Andy Smith note:

"We cannot stop terrorism or defeat the ideologies of violent extremism when hundreds of millions of young people see a future with no jobs, no hope, and no way ever to catch up to the developed world" Hillary Clinton, Remarks to the Center for Global Development at the Peterson Institute for International Economics

For a moment there I thought she was talking about the US - "when millions of young Americans see a future with no jobs, no hope, and no way ever to catch up to the Baby Boomers". Generational class warfare anyone?

"could seriously disrupt bond markets if it triggered concerns about creditworthiness or inflation because of concerns with government incentives to inflate debt away" Bank for International Settlements in invitation to top central bankers and financiers for a meeting in Basel

This doesn't need any further comment for readers of this blog, suffice to say I find it interesting that the BIS acknowledges that inflating debt away is an option.

PS - unfortunately Andy Smith's stuff is not publically released, because I rank him as the top precious metals analyst.


  1. I will pass on anything andy has to say. see this article.


    In 2003
    "Andy Smith, the veteran Mitsui Global Precious Metals analyst, forecasts gold's price in the next five to 10 years: below $100"

  2. If you pass on Andy, who is now long gold, does that mean you are short gold? :)

    I consider him a top analyst because he always has unique insights and views. That doesn't mean I always agree with them, but he makes you think and question your position. There is far too little of that in the gold bug community.

  3. Nice quote Anonymous ;)

    I guess at least BIS is acknowledging the increased risk taking. Everywhere else it is "things are back on track".

    As you say Bron, it is interesting to note inflation discussed as an option, especially in the context of risk taking. Does the BIS really think that high inflation will result in less risk taking? Au contrare!