[Gllug] OT: Debt

[Bernard Peek]

On 04/03/10 11:19, John Edwards wrote:
> On Thu, Mar 04, 2010 at 10:36:44AM +0000, Peter Childs wrote:
>    
>>
>> Does that work with personal debt too?
>>      
> Yes.
>
> Inflation reduces the value of the currency and hence the value
> of the debt. But it erodes both debt and savings, and has strong
> feedback effects.
>
>    

Surely that's only if the debt value remains static? Personal loans are 
usually made at interest rates greater than inflation, so the value of a 
debt increases faster than inflation. Are sovereign debts made at lower 
rates?



-- 
Bernard Peek
bap at shrdlu.com

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