Re: Keynesian Christmas!-- and the collapsiing international

[Warren Mosler <mosler@xxxxxxxx>]

Juan Jose Barrios wrote:

> But aren't you assuming that people want to hold the currency in the first place?

Requiring for payment of taxes means they will want at least enough to
pay taxes.  That allows the govt. to run a 'balanced budget.'  To the extent
they want to net save the new currency, the govt. is able to 'deficit spend' it.
Without needing to borrow it.

>
> What if they just dont want the money because they know its purchasing power will
> be drven down as soon as the currency hits the street....??

The govt. will drive down the value if it decides to deficit spend by paying higher
and higher
prices.

> FYI, the govt. is
> retreating from issuing the new currency.....jj
>

Too bad....  Maybe they will just float the peso.  That will functionally do the same
thing,
though technically a default on the peg promise.

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