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by jussij 2515 days ago
You are describing inflation caused by consumption (i.e. high demand driving up prices).

The inflation the OP was describing is the massive inflation caused by printing money.

The US bond is effectively an IOU representing US dollars the USA owes the bond holder.

For the USA to buy back those bonds they only have two choices:

1. Run an strong economy earning lots of US dollars (i.e. a trade surplus) and use that USD income to buy back those bonds.

2. Turn on the printing press and print lots of USD to buy back the bonds.

That later option would render the USD worthless and since most commodities are priced in USD that would also lead to hyper inflation.

2 comments

There are second order effects: if billionaires start buying stocks, thereby increasing the value of RSUs that tech employees hold, this can cause inflation in housing prices.
Options you missed:

3) sell more reserves (gold, currency)

4) bond swap with other countries