> ...because we run permanent inflation... Interest existed for 100's of years before the fiat model. Interest is not paid on money, its paid on time of alloc

> ...because we run permanent inflation... Interest existed for 100's of years before the fiat model. Interest is not paid on money, its paid on time of allocated capital. If you dont have money you can still collect interest in the form of goods - I give you 100 seeds, you return 1000 seeds to me next year. Without interest there is certainly not lending, so the owner has to invest themselves or consume the capital. It would definitely be better that investment were not issued as debt and were always equity to prevent many ugly side-effects, but thats not a configuration applicable to everything, so this is what you get. > In any other context the optimal interest rate is always zero because any higher than that prevents investments due to artificially high profitability requirements beyond what is available in the real economy. This is mixing macro-economics with micro-economics. Even in a contraction economy you have growing businesses, which mean there is demand for capital for production itself. 0% interest rate means there is no demand for capital, which is not true even in North Korea. Interest is just a price, like any other good in the economy.