0% actually means the debt gets cheaper overtime because inflation. You’re thinking about it backwards.
Think about it through the perspective of the issuer. If they are investing money through debt issuance (with their return being interest paid by borrowers), the loans going to 0% means they do not get any income/return. So us consumers are on the opposite side and benefit from inflation if we have a fixed rate under annual inflation.
benb2816 karma
0% actually means the debt gets cheaper overtime because inflation. You’re thinking about it backwards.
Think about it through the perspective of the issuer. If they are investing money through debt issuance (with their return being interest paid by borrowers), the loans going to 0% means they do not get any income/return. So us consumers are on the opposite side and benefit from inflation if we have a fixed rate under annual inflation.
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