[doubleunplussed]

I forget where I read it, but I found it convincing, that printing money to pay debt to large investors does not cause significant inflation. The investors will not spend the cash on consumer goods, they will probably just loan it right back to you and the money remains locked up and not circulating in the economy. There ought to be nonzero inflation as a result, but only a tiny fraction as much as if the money were injected at the bottom where people are more likely to spend than save.

[jganetsk]

The idea that a government with control over its own currency can print money to pay debt without significant inflation is a part of Modern Monetary Theory. Here's a blog post explaining it: http://bilbo.economicoutlook.net/blog/?p=31715