Re:A $9T corporate debt bomb is 'bubbling' in the US economy
by imtringued on Monday December 17, 2018 @04:57PM
(#18702609)
The interest doesn't disappear, it lands in the pocket of the lender, only the principal does disappear.
If you do indeed lend 100k$ from a central bank and they "print" the money then the money supply increases by 100k$ for the duration of the loan. When you pay it back the money vanishes into nothingness again. Interest payments go to the central bank which makes a profit, governments spend the income and the money starts circulating within the economy again. [1]
If you do indeed lend 100k$ from a central bank and they "print" the money then the money supply increases by 100k$ for the duration of the loan. When you pay it back the money vanishes into nothingness again. Interest payments go to the central bank which makes a profit, governments spend the income and the money starts circulating within the economy again. [1]
[1] https://www.ecb.europa.eu/explainers/tell-me-more/html/ecb_p...