Re:Negative Rates Are Rewriting the Rules of Modern Finance
by samsonradu on Tuesday October 01, 2019 @05:23AM
(#21123525)
Uhm... no.
I borrow $1000 and promise to pay back $1050. Lender now has a $1050 IOU which he will likely put into circulation (borrow against it, trade it etc.). Monetary supply just increased by $50.
I borrow $1000 and promise to pay back $1050. Lender now has a $1050 IOU which he will likely put into circulation (borrow against it, trade it etc.). Monetary supply just increased by $50.