Yeah, just because a currency is deflating doesn't mean you can't charge interest and have it be worth your while. You get back your principal plus whatever am

Yeah, just because a currency is deflating doesn't mean you can't charge interest and have it be worth your while. You get back your principal plus whatever amount it take to make you take the risk. Inflation is worse for lenders than deflation. Each dollar they get back is worth less when it is returned, not more. Borrowers love inflation. If there was great deflation, it gets quite painful to pay back loans. The lender is quite happy about it though. I think I read, though, that both severe deflation and inflation push up rates. If deflation is severe, it can push many borrowers into bankruptcy, making lending more risky.