Krugman on European Financial Suicide

[Matthew Cissell]

I'm no expert on the issue, but I believe that what Mr. Krugman recommends is that the governments temorarily raise their inflation limit. His argument is that inflation is not the great present threat that some would make it out to be, of course I don't think that means that he is unaware of or unconcerned about the effects of run away inflation.

Again, I'm no economist, but I don't think Krugman's proposal would lead to the 'lenders losing' and the debtors winning, at most it would add up to some minor easing on those who are underwater. It's not a bail out. I don't think you need to worry too much about your bonds or securities.
Oh, I could be wrong, but I don't think all Germans are of the same mind on these matters. I don't think even Kai or Otto know how all Germans feel.
None of us knows exactly how this all happened or what is best to do, the economists don't even agree. However, I don't plan to die anytime soon and I think in 10 years we'll be able to look back on this and find out what responses were best for these economic difficulties.

mc otis

----- Original Message -----
From: alice wellintown <alicewellintown at gmail.com>
To: pynchon -l <pynchon-l at waste.org>
Cc: 
Sent: Tuesday, April 17, 2012 12:17 AM
Subject: Re: Krugman on European Financial Suicide

Sure, inflate. But the economist doesn't deal with the stake holders.
Who will be helped by inflation and who will be hurt by it? WE've the
same case here in the US. Inflate and housing prices will go up, those
who owe will be bailed out by inflated cheap money payments. This is
the bail out Morris was asking for, the bail out of the 99% who got in
over their heads and now want a bail out. Afterall, the banks got
bailed and so did the auto companies and so on. So why not inflate and
bail out the home owners? Why not inflate and save the Euro and Spain
and so on? Why not? Because it's not a win win. It's a win lose. The
debters win and the lenders lose. Why should the lenders lose? Why
should those who have saved and invested and lived within their means
not beyond them, lose out? Inflate the price of my bonds, bonds with
big coupons and call protection, will fall like rocks. Why should the
value of my securities drop so that those who owe me the money can get
out of trouble? No thanks. I'm German on this one.