Friday, January 21, 2011

Post 25

One group of Americans that would love inflation is the borrowers. Borrowers have borrowed money in the form of loans from banks. They have to pay back the money they borrowed plus interest every month. If inflation occurs, the value of the money they borrowed goes down. If they owe $100,000 and pay it back during a time of inflation, the value of that $100,000 would actually be less than if it was not a time of inflation.

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