Within a year or two we will experience a rate of inflation that will equal anything any living person can remember. How so?
The Post-Gazette articles on the U.S. budget deficit suggest a trillion dollars at the least, maybe much more. Where does the money to finance deficits come from?
In the recent past, foreign investors and governments have acquired massive U.S. debt obligations. You have reported that China bought $1 trillion worth ("China Concerned About U.S. Holdings," March 14). But does China, or any other group of nations, have more trillions to invest?
No, we will run out of foreign lenders and our own banking institutions have pitifully little cash to spare. What then? How can we put our hands on another trillion?
Easy. Print it.
The Treasury and the Federal Reserve system will use semantic trickery to disguise the process. But the grotesquely huge piles of cash hurled into the marketplace will still be printing-press money and will accomplish what printing astronomic quantities of currency always accomplishes: Inflation! Hope I'm wrong.