5 ms·

Trump is pushing for negative interest rates. Wouldn't that break Capital free?

• specialist 7y ago
  Sorry, I have no idea. I can only repeat what I've read. Others have compared inflation to taxation; both reduce capital over time. So is the converse true? Does lower, or even negative, inflation favor the hoarding of wealth?
  • benaadams 7y ago
    Yes. Inflation decreases debts and means people with wealth need to do something with their money (e.g. invest) in order to retain its value. However, speculative increases (buying land for increase in prices, buying shares for increase in share price, etc) and rent seeking adds price but doesn't add real value/investment to the economy.