7 ms·
Consider the meaning of interest rates. I work 10 hours in exchange for 10 moneys. I could exchange it for 10 hours work from some other guy. But what does it m
by barelyauser 3y ago
Consider the meaning of interest rates. I work 10 hours in exchange for 10 moneys. I could exchange it for 10 hours work from some other guy. But what does it mean when I purchase a government bond and make 1 currency per year of interest? I can purchase 1 hour of work in exchange of nothing. People are not working for me because I work for them (a fair system). They work for me because I'm the dragon with a pile of gold, and gold must come back to me.
- rafaelmn 3y agoExcept when inflation eats your savings at faster than 1 unit per year. Even in low inflation/normal interest rates you need a lot of savings to live off of interest alone.
- melagonster 3y agoBut rates is designed to pay the loss from inflation. little inflation requires rich people investing something.