Inflation and Interest Rates
Posted in debt on Mar 17th, 2008
Inflation makes tomorrow’s dollars worth less than today’s. That makes borrowing more attractive to borrowers, but lending less attractive to lenders. In order to compensate, lenders raise interest rates, since (among other things) they too know that the dollars they will be repaid next month are worth less than the ones they loan out today.
So, [...]
Popularity: 4% [?]
