Karl Smith says that a government with it’s own currency can never be insolvent.

Karl Smith says that a government with it’s own currency can never be insolvent. But this is not true. There is a very practical point whereupon the rate of inflation makes planning and coordinating production impossible because prices along the production cycle are no longer calculable. At that point production rapidly crashes, consumption rapidly crashes, people ‘forget’ skills and relationships that make businesses cooperate. They abandon social conventions and mores. They develop black markets for goods and social status. The tax base crashes. And public order fails. To the modern macro economists this is an absurd and impossible probability. To Austrians it is a deterministic and logical consequence of monetary policy.