My understanding has always been that bankers HATE inflation because most of the loans they make are with FIXED interest rates --- yes, there are ballooning mortgage interest rates but mostly (certainly during the unexpected inflations of the 1970s) bankers got burned by inflation.
A banker who owned a 4 percent mortgage from 1970 was LOSING MONEY once interest rates got past that amount --- while BORROWERS (whichi includes lots of big corporations as well as citizens who buy fixed rate mortgages) do very well in periods of high unanticipated inflation.. NOW --- bankers are not stupid so after the 1970s they began building an anticipated inflation rate into their money rates of interest but it is not all that easy to predict. that's why it is a good rule of thumb that borrowers gain and lenders LOSE in periods of inflation --- especially when inflation surges --- On Tue, Nov 12, 2024 at 4:39 PM hari kumar via groups.io <hari6.kumar= [email protected]> wrote: > I am definitely not sure-footed in the realm of economics. However, for a > long time I have believed/argued that the financiers (rather than the > industrialists) - benefit from inflation. I was somewhat chuffed to see the > 'Daily Shot' data below today. There are I know, many far better versed > economists than I on the list. Anyone have a comment about this? Thanks for > considering, H > _._,_._,_ > > -=-=-=-=-=-=-=-=-=-=-=- Groups.io Links: You receive all messages sent to this group. View/Reply Online (#33545): https://groups.io/g/marxmail/message/33545 Mute This Topic: https://groups.io/mt/109543856/21656 -=-=- POSTING RULES & NOTES #1 YOU MUST clip all extraneous text when replying to a message. #2 This mail-list, like most, is publicly & permanently archived. #3 Subscribe and post under an alias if #2 is a concern. #4 Do not exceed five posts a day. -=-=- Group Owner: [email protected] Unsubscribe: https://groups.io/g/marxmail/leave/13617172/21656/1316126222/xyzzy [[email protected]] -=-=-=-=-=-=-=-=-=-=-=-
