What is the monetization of debt?

Answer by  bizgrad02 (103)

We use this every day. This is taking a product and turning it into cash. Such things are gold, gems, and art. Remember, beauty is in the eye of the beholder. What is worthless to you may be priceless to somebody else. The Government also does this by printing bank notes.

Answer by  dr84bhl (2789)

The word debt means the money you owe on loans and credit cards that a person has borrowed. Money you borrow is a debt that has to be paid.

Answer by  mlucas (515)

I hope this isn't for Dr. Ferdon's Political Economics class. It is the process where the Government issues bonds to raise money for Government spending using Reserve notes provided by the central bank in stead of using a more inflationary process of printing money.

Answer by  maximino (26)

Monetization of debt means that the bonds representing the debt are converted into cash. Typically this term is used for government debt, but business debt can also be monetized.

Answer by  Dean (4035)

Monetization is the process of changing something into legal tender (money). It usually refers to the the central banks printing money, but things such as gold can be used.

Answer by  tamarawilhite (17883)

Monetization of debt as happened in the United States occurs when there are no private or institutional buyers of debt, and the Treasury (i.e. the government) buys its own debt.

Answer by  MarshaKeeffer (74)

Corporations sell bonds. Doing this gets people to risk the money they paid for the bond while they earn current interest. Hopefully, the buyer will receive back their purchase funds.

Answer by  smoore (30)

This means that the government prints money to pay debt rather than relying on taxes or other revenue sources. It causes inflation, which is a tax on money.

Answer by  MelindaS (1694)

Monetization means literally making, or producing, money. When a country monetizes its debt, it basically produces money at the mint, and uses the newly made money to pay on debts.