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It's a double-edged sword. For people with debt, the value of their debt decreases as inflation rises. If salaries rise with inflation, even with some lag, the
by neartheplain 5y ago
It's a double-edged sword. For people with debt, the value of their debt decreases as inflation rises. If salaries rise with inflation, even with some lag, the debt becomes easier to repay.
- seibelj 5y agoThere is a small benefit. However it’s a negative to the lenders which include many socially advantageous institutions like pension funds which purchase securitized debt. The negatives are so numerous it’s a struggle to find any upsides. Luckily I am rich and own property with government-subsidized fixed rate mortgages so I will ride out all the terrible outcomes with a shrug.
- cudgy 5y agoWhile your stock portfolio drops massively as people move to i-bonds/commodities and your property prices fall as well since noone can afford to buy property at the higher interest rates.