Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

‘Everyone believes the Fed's job is to fight inflation, however right now the Fed is in fact doing everything it can to cause inflation. Why?

It part to assist the economy get cranking again. Inflation gives an incentive for people to spend cash rather than saving it, since if they save it, the cash will lose value rapidly.

Inflation also assists solve another problem, though--our debt problem. The more inflation we have, the less our dollars will be worth. Since our debts are based on a specific number of dollars and not a specific value, the less our dollars are worth, the simpler it will be for us to pay off our debts.

(Imagine owing someone 100 Zimbabwe dollars at a time when the currency is collapsing. When you wait a week, the value of the Zimbabwe dollar will have subsided, and you'll be capable to pay off your 100 Zimbabwe-dollar debt with currency that is only worth half as much as it was the week ere).

The Fed can't admit that one reason it wants high inflation is to lessen the real burden of our debt, but you can bet that that's one of its objectives and aims. What's more, says Nobel-winning economist Paul Krugman, inflation must be one of the Fed's objectives and aims. Since that's how we've gotten out from under debt burdens in past."

Fed has been pumping money into the economy after the recession to excite the economy. Why does that create the expectation of higher inflation in the future for investors? How does that affect a country's currency value? Remember the relation with China and US. China is a net investor in US assets and US is the net borrower of capital from China. Will China be happy with Fed's recent monetary policy? Why? Does printing money create sense from the US perspective given its debt situation? Why?

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93798

Have any Question? 


Related Questions in Financial Accounting

Tracy company a manufacturer of air conditioners sold 100

Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2011. The units have a list price of $500 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/ ...

Case second department-weighted-average methoddurall

CASE: Second Department-Weighted-Average Method Durall Company manufactures a plastic gasket that is used in automobile engines. The gaskets go through three processing departments: Mixing, Forming, and Stamping. The com ...

Question 1archer daniels midland company is considering

Question 1: Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.00 million. This investment will consist of $2.00 mill ...

Half a page double spaced answering the 2 questions on 4

Half A Page double spaced answering the 2 questions on "4 corners COMMUNITY NURSERY INC." 1.) Discuss the financial statements...are there financial trends that show the org is meeting its mission? 2.) The analysis of th ...

Infrastructure of homeland security hmls 4081 i choose the

Infrastructure of Homeland Security (HMLS 408) 1. I choose The Department Of Energy 2. Parts I and II are to be submitted as one submission, in the form of a continuous document. Make sure to delineate/identify part I an ...

1 at what position levels of employees is ethics an

1. At what position levels of employees is ethics an important part of decision making in a company? 2. The Foreign Corrupt Practices Act outlaws what type of business practices and how? 3. Conduct a Porter’s 5 forces an ...

Introduction to financial accounting assignment please

Introduction to Financial Accounting Assignment Please answer all Questions.  QUESTION 1 - Frank, a hospitality event consultant, started business on 01 May. The following is a list of transactions for the month of May.  ...

Discussion financial conditionbullfor this discussion

Discussion: Financial Condition • For this discussion, assume the role of a financial manager in a company, and assume that you have just hired a new bookkeeper to join your team. You want to assess the new hire's unders ...

Assignmenta manufacturing company is thinking of launching

Assignment A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and m ...

1 differentiate between economic rights and non-economic

1. Differentiate between economic rights and non-economic rights under the 14 th amendment. 2. Explain the importance of quality management and apply statistical quality control techniques. 3. To what extent do sole prop ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro