How best to deal with debt?

May 5, 2009 11:56am by

Ben Bernanke and the FOMC have the fed funds rate currently at zero and
with a straight face in the Q&A today, he says he’s committed to price
stability. He has one unspoken goal in his policies and that is to
inflate our way out of this current economic malaise. The Fed and
Treasury are not letting both the financial sector and the household
sector properly delever as easy money again only encourages refinancing
existing debt rather than extinguishing it. Bailing out bond holders and
standing in the way of debt for equity swaps in the financial sector is
also delaying the inevitable deleveraging. Thus, debt paydown and debt
writedowns are taking a backseat to the goal of inflation in dealing
with too much debt.

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