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If there is no state guarantee of inflation indexed bonds, issuers of such bonds can be driven bankrupt by inflation, and people who put their wealth in them would lose out.

The problem currently is not that they do exist, but that governments (such as the French) do issue them.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Sat Jan 21st, 2012 at 11:08:19 AM EST
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