French official says U.S. trying to inflate away debt
10.20.09, 06:30 AM EDT
PARIS, Oct 20 (Reuters) – The United States is pumping out liquidity to try to inflate away its debt, leading to the depreciation of the U.S. dollar, Henri Guaino, a top advisor to French President Nicolas Sarkozy said on Tuesday.
He told reporters on the sidelines of a conference of Sarkozy’s ruling UMP party that the United States was ‘flooding the world with liquidity’.
Guaino worried about a risk of an inflationary cycle.
‘Historically, we have only ever got out of such situations with inflation. We can also get out with deflation, but it’s much more painful politically, socially,’ he said.
‘How can we stop the depreciation against the euro, if not by creating euros? The result is that you create inflation.’
But ‘if we lose control of inflation and there is hyperinflation, it’s a catastrophe for everyone,’ he added.
Leaders’ Statement On The Pittsburgh Summit
Get Briefed: Todd Harrison
Service & Retail
Get Briefed: One Year Of Intelligent Investing
Related VideosCountry of Equal OpportunityProfits Triple At Deutsche BankAndrea Illy’s Espresso ObsessionDiageo CMO Andy FennellApple Can’t Cure Econ Blues
StoriesVideosRate This Story
Your Rating Overall Rating Reader Comments
The USA can’t inflate away the debt unless the government balances the budget simultaneously. On the plus side, this should stimulate export industries in the USA and reduce imports. However s
Post a Comment(Reporting by Emmanuel Jarry; Writing by Anna Willard) Keywords: FRANCE INFLATION/
(Reuters Messaging: firstname.lastname@example.org; +33 1 49 49 5339; email@example.com)
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Neither the Subscriber nor Thomson Reuters warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other information, is provided by Thomson Reuters and its third party content providers for your personal information only, and neither Thomson Reuters nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.Click here for reuse options!