What Exactly is Monetization?

One of the things that people might be hearing from the economics blogs is the question of whether – and to what extent – the Federal Reserve System is gaming the system.  What is meant by quantitative easing and what does it mean to say the Fed is Monetizing the Debt

The above link is to an article in a business/economics site entitled Zerohedge.  The site is like many other economics sites in which the writer (here the pseudonymous Tyler Durden) has a particular point of view as to how things will turn out in the world of money.  In this case, Durden espouses the case of monetary collapse and hyperinflation, which is a particularly scary outcome arising from our economic difficulties. 

The reality is that times are truly tough and no one knows what’s going to happen as a result of these policies and actions.  But the article does a decent job of explaining what it means when you hear talk of monetizing the debt and walking through the essential pathways of how it happens, so I thought it might be of some benefit to folks.  As an additional treat, follow the comments thread for an eye-opening look at what some others believe and the opinions and arguments that they make.  It makes for fascinating, eye-opening and occasionally hilarious reading.

I have no final idea of what’s going to result from the policies and actions of our leaders and central bankers.  But follow enough and you’ll learn that neither does anybody else, so we’re all even.

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