In the space of 12 years at an inflation rate of around 6%...

In the space of 12 years at an inflation rate of around 6% relative debt levels could be halved.

Urban myth, true only for nation states UNTIL the bond vigilantes jack up their borrowing rates as is happening with the PIIGS and yet to happen with the US.

For us with domestic borrowings, no matter how high inflation, our interest paid will always 3-4% higher and our lenders will ALWAYS get their pound of flesh. There is NO free lunch. If you own property there will be an inflation component which increases the nominal value of the part you own, but your lender will pocket the apparent inflation on the rest because you will have to pay it to him (cash) every month.