Final Word from Wednesday, August 3, 2011

In a recent letter to The Economist, Daniel Arbess of the New York-based corporateadvisoryfirm Perella Weinberg said the U.S., Japan and the U.K. could inflate theirway out of their debt problems. Printing more money would weaken the consumerpurchasing power of rich countries, increase their export power, and help rebalancethe global economy in favor of China and other underleveraged growth economies,he said. Czechs with a long memory might recall this same Daniel Arbess as the exlawyerwho joined forces with Viktor Kožený and Michael Dingman in 1995. StrattonInvestments used a huge media campaign to pull off the biggest corporate greenmailscheme the CR has ever seen. Hyperinflation would certainly wipe out some debt,but it also might also turn some very powerful peacetime creditors into bellicoseenemies. But not before some seasoned speculators made a lot of money.

Glossary of difficult words

underleveraged - not having an adequate level of debt;

greenmail - the practice of buying enough shares in a company to threaten a takeover, forcing the owners to buy them back in order to retain control;

bellicose - demonstrating aggression and willingness to fight;

seasoned - experienced.


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