Thread

Which reserve currency would that be? The Weimar Republic in Germany in the '20s would be a good example "Interest rates soared to astronomical levels as the government printed money recklessly to finance its debts, leading to hyperinflation. By November 1923, the interest rate reached an astonishing 900%. This extreme inflationary environment rendered traditional monetary policy ineffective, as the currency rapidly lost value, causing widespread economic chaos."

Thanks for that. I've probably been thinking about this wrongly. In a hyper inflationary env I guess the central bank has competing priorities: high rates need to bring inflation under control, but low rates preferred to allow government to still service its debt. I'm still curious which would prevail in a debt spiral.

I guess the central bank eventually just "reforms" the currency and starts from scratch and everyone owes them.