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<p>[QUOTE=&quot;Cloudsweeper99, post: 1443263, member: 3011&quot;]What you are missing is the possibility of default, shich would be deflationary.&nbsp; Of course, they won&#039;t call it default.&nbsp; But eventually the debt will be restructured.&nbsp; For example, the Treasury could force the conversion of all bonds held by the Federal Reserve into non-interest bearing perpetual bonds.&nbsp; Nobody would notice or care any more than they cared when the Fed stuffed their balance sheet with worthless assets purchased from banks.&nbsp; Or they could declare that all short term debt is now 100 year debt without changing the coupon rate.&nbsp; Or the government could force all employees to use 5% of their paycheck to buy bonds on some unfavorable terms, or force conversion of 401k and IRA funds into Treasuries.&nbsp; Right now all of these options seem far fetched, but won&#039;t be in a real crisis.</p><p><br /></p><p>It is possible that all of the debt will be monitized, but my guess is that a shadow default will be the preferred course of action once there are no more financing alternatives.[/QUOTE]</p><p><br /></p>

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