Gartside's Gazette

"One of the greatest disservices you can do a man is to lend him money that he can't pay back."

Jesse Holman Jones, US Commerce Secretary 1940-45 and head of the Reconstruction Force Corporation 1932-45, was one of the principal architects in dragging the US out of the Great Depression and certainly knew a thing or two about money-lending and the perils associated with it. His advice is critical for modern-day bond investors who are essentially money-lenders. Scanning the globe today, the largest constituency of borrowers that comes under Jones’s maxim are developed Western governments. Governments face three choices: default on the debt, repay it or inflate the debt away. The firs...