dude means that it devalues the debt by the standpoint of the creditor.Imperializt Russia wrote:Mezonpotania wrote:By making more of a currency to pay of debts.
Which is terrible by the way, by making more of a currency, you are devaluating it, and thus keeping your debt at the same size while also reducing the wealth of your country.
Governments aren't all knowing, they are humans, just like us. They don't consider every factor.
No.
A debt is a fixed figure of cash value money you owe someone, minus the interest.
Inflation functionally devalues the figure of debt.
After 100% inflation, a £3000 debt is "worth" only £1500 of "old money", because it's still valued at £3000.
Meanwhile, your pay packet goes from £20k to £40k.
That said, government bonds have low returns in the first place, regardless of the rate of inflation.