sagelike

At recent Mauldin SIC conference David Rosenberg said this:

David said, “There ultimately will be a debt jubilee. And it’s got historical connotations as well. This will happen in the next cycle. We will basically have a situation where the Fed and the Treasury will do a swap. And then we’ll move on, reset the button, and we’ll be talking more about inflation then, than we are today. But that’s for another day.”

What does that actually look like? What will effect does it have on everything?

I can't find any info on this and would like to hear your take on this.

Thx
Glenn

Comments (3)
No. 1-3
hmk
hmk

I read the same article and tried to find the Bernanke speech he referenced. I looked it up from November 2002 and couldn't find that reference only the mention of helicopter money. I also wonder how that would be implemented and what the repercussions would be. Any holders of Treasures would be wiped out so it would result in massive problems. I don't understand the idea or how and what it would effect. I would love for someone with knowledge of this explain it.

sagelike
sagelike

I'd love to know to! Mish, can you provide any insights on this? I read the comment from Rosenberg but didn't elaborate.

Mike Mish Shedlock
Mike Mish Shedlock

Editor

A debt Jubilee implies debt forgiveness. The Fed cannot do that and likely would not do that if it could. Congress could do that, not directly, but by giving everyone cash. Steve Keen is a proponent of the idea. I am not. If it was accompanied with a return to a gold standard, an end of fractional reserve lending, and end of public unions, etc, it might be a reasonable tradeoff.


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