BurnYankee seems to be going for door #2. Currency wipeout...
Yes our central bankers are certainly choosing door #2, but I wonder if their choice is irrelevant after a certain phase. If people flee to cash, and credit becomes scarce because of this fiscal conservatism, the effect could very well be a de facto increase in the reserve ratio, offsetting the Fed’s attempts to re-infuse credit, and shrinking overall dollar claims. A stronger dollar by deflationary default?