Federal deficits and trade imbalances cause inflation?
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Yes. Deficit funding creates “money” out of thin air. Wealth on paper. Then people spend the wealth. We pay the interest on the “wealth.” When it becomes unsustainable to pay the interest, and people require more interest to take the risk of buying our paper, we take a hit on our wealth, and the game is over with us as the loser.
The Treasury sells a 6 month T-Bill. I take money out of my checking account to buy it. Where is money created out of thin air?
Wealth on paper. Then people spend the wealth.
Huh?
We pay the interest on the “wealth.”
Yes, I'd expect to be paid interest on the money I loaned to the government.
When it becomes unsustainable to pay the interest, and people require more interest to take the risk of buying our paper, we take a hit on our wealth, and the game is over with us as the loser.
The biggest losers will be people who don't understand economics (hint, hint).