Re:In Argentina, inflation is a way of life
by drugstorecowboy on Friday January 28, 2022 @12:15PM
(#30117506)
Where are these people that make these types of loans? This is so far out of my experience, I truly just cannot imagine these situations actually occurring. From a business perspective you would just be setting money on fire every time you made a loan, and you would know it.
Roughly: - borrow $1mln - buy $1mln of coffee, regular price $10/kg - sell immediately at $8/kg (lower price helps move the goods quickly) - pay back $1mln loan
By the time you paid the loan back, $1mln no longer has the same value. And so the $1mln you paid back is really only worth way $500k.
Add to this lack of stability due to war and you may not even pay it back … perhaps you refused to pay, company went out of business, you borrowed from someone who is no longer around (alive, fled the country, etc), or any other number of related reasons. In that case it ends up being pure profit for you. Not so easy to enforce or later track down.