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How to Pay for Thanksgiving Dinner
Are food prices soaring?
Ever since the 2008–2009 crisis, the thinkers, pundits, and writers who ascribe to the Austrian School of economics have assured us that massive inflation was going to start. They assiduously refused to provide a date, but they assured us nonetheless, often suggesting we hoard gold and silver.
I long ago gave up on massive inflation happening. There were just too many countervailing considerations.
Like the United States army. As long as the U.S. dollar is the reserve currency, it has value everywhere in the world. It will continue as the reserve currency as long as the U.S. army is respected everywhere in the world.
The syllogism: If you have the strongest army, your currency has value no matter what. The U.S. has the strongest army. Therefore, its currency has value no matter what.
Here’s how it works. I’m framing this as precisely as I can, while keeping it simple:
The federal government decides it needs money. It prepares a debt instrument that promises to pay $trillion.
The Federal Reserve then adds $trillion to its ledger by keying it into their ledger (literally creating the $trillion from nothing).
