I’ve read that many banks want a certain level of inflation and I don’t really see why. Why is important to banks that a stable product costs more tomorrow than today?
Is it to make people spend their money more since storing it will eventually make is worth less?
In: Economics
Ladies and gentlemen, the government wants inflation so the loans it took out from the reserve (1.9 trillion or whatever it was this year in the US) will not actually be 1.9 trillion when they actually have to pay it back. The loan will decrease, not number wise but value wise, over the term of the 30 year loan. So while they took out 1.9 trillion, when they have to pay it back that exact 1.9 trillion is worth drastically less.
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