Unlimited credit for PIGS

February 13, 2013 in Uncategorized

Unlimited credit for PIGS

America and Japan successfully use the economic policy of unlimited credit in their economies: creating inflation in the case of Japan and quantitive easing in the case of the USA.
Europe, on the other hand, uses the economically destructive policy of austerity in Portugal, Ireland, Greece and Spain (PIGS).
Inflation means that where the inflation is created, i.e., where the unlimited credit or free money is injected in the economy the country receives unlimited credit at no cost while the rest of the economy (consumers) pays for it in a slight increase in prices over a single year.
The ECB should supply PIGS with unlimited credit and consumers in the European Monetary Union would pay for it in a sligth increase in prices in every transaction over a single year. This would eliminate the neccessity for disastrous bail-outs at punitive payback rates that could stretch over a number of years.
When PIGS are economically sound again, the ECB would stop the unlimited credit.
Nicolaas Smith
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