[hvb2]

That is a valid point, however if you look at Germany you will see that as soon as your money is worthless people will want payment in something else.

If a country ever decides to use your 'monetary sovereignty' they might as well just stop playing their debts as any holder of the debt will see that as the same thing. They're not getting their money back, or when they do they get it in a currency now worth a lot less. At this point you can say you're still solvent in the same way as you can say you did repay all your debts.

See https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...

[pydry]

Search for the phrase "gold marks" in your link. This is the key. Gold denominated debts != paper denominated debts and Weimar debts were always gold denominated.

It might seem like a minor distinction but it's actually very important. Gold can't be printed, whereas currency can be, so insolvency when your debts are denominated in gold is very possible.

Argentina is also another example of a country that suffered hyperinflation because it had debts denominated in something it could not print (dollars).

Whereas Japan had even higher debt / GDP than Argentina and got deflation instead.

[hvb2]

I understand your distinction, and I reiterate that this is a valid point.

However, it's a bit moot in my opinion. When the US owes me $100B and they pay that by 'creating' $100B through the central bank, in terms of value of the currency that's bad because there value of that payment dropped.

You can do this, it's what the quantitative easing policy did, but only in very limited amounts. If you were to do it because you were no longer solvent I would expect it to be the end of the trust and value of your currency. So in a sense it's not very different.