Going forward, worldwide saving will fall, and central banks will face a dilemma. As inflation appears, they will want to stop it by raising interest rates. But if they do that, governments won’t be able to afford the interest cost on their debt, so central banks will be forced to monetize a large share of debt.
The central bank will cause deflation by trying to kick the can. The ydiscover the can will not kick and we get devaluation. How much real inflation we get with a devaluation depends on the terms of the devaluation, it needs to be negotiated. The inflation should peak at about 6%, that is we should do somewhat better than Nixon.
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