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That would not do you any good if the interest rate behaved like the loanable funds models predict and just added inflation to the market-clearing real interest rate. It would help the bank, because your unpayable loan (due to high interest compensating for the reduction of the excessive principal through inflation) would be secured on less crummy collateral. But it wouldn't help you.

Fortunately, interest rates don't work according to the loanable funds model.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Dec 12th, 2011 at 01:04:06 AM EST
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