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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: copper000 who wrote (28465)3/11/2005 11:57:19 PM
From: bignadda2  Read Replies (2) of 110194
 
lender is being paid back in dollars that are worth less.

assume that you loan someone $100. today, $100 can buy 10 big macs.

inflation causes the price of big macs to double.

now when you get paid back $100, you can only buy 5 big macs.

under this inflationary scenario, the borrower benefited at the expense of the lender.
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