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1

The correct rate for present value calculations is the discount rate. The inflation rate is inferior because it does not allow for other considerations such as risk. A quoted "interest rate" is context dependent so it cannot be evaluated by the magnitude of the rate alone. Which person or organization is quoting the rate? Is it wise to rely upon ...


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The same reason that oversupply leads to falling prices in any other market. There is a huge amount of money out there, and a lack of good returns with adequate levels of safety, so money is cheap. The reason this leads to negative rates is that money, like other goods, has a carrying cost. Keeping physical cash requires heavily secured real estate and is a ...


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If there is inflation, what is your alternative? If you do not lend, your money loses even more of its value. A numerical example: If inflation is 5% and you can lend at 2% nominal interest rate, you can make the loan and lose 3% of your money's purchasing power OR you can not make the loan and lose 5% of your money's purchasing power. Poor choices, but ...


0

As you have been already answered on therms of the quantitative equation of money, I will give you others approachs between the realtionship of these ways of funding and real variables. First, more printed money lead to more assets and therefore more demand coming as effect of this new financial wealth, that could lead to inflation as well, depending on the ...


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