2 ms·
"low interest debt is a solid hedge against inflation" ? It literally is just that. As inflation increases the value of a loan decreases. EG. The value of you
by ransom1538 4y ago
"low interest debt is a solid hedge against inflation"
? It literally is just that. As inflation increases the value of a loan decreases. EG. The value of your money today is worth more than the value of your money tomorrow. So you pay your loan at a fixed rate over time with money that is worth less and less. Inflation eats loans. The dumbest thing you can do is pay off a loan with todays dollars during high inflation. People that win in inflation hold massive cheap debt on real assets. [their loan devalues to nothing AND their assets increase in value]