You get $1000. You pay back $950. The monetary supply increased by $50. | Hacker News

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imtringued on Sept 30, 2019 | parent | context | favorite | on: Negative Rates Are Rewriting the Rules of Modern F...

You get $1000. You pay back $950. The monetary supply increased by $50.

samsonradu on Oct 1, 2019 [–]

Uhm... no.

I borrow $1000 and promise to pay back $1050. Lender now has a $1050 IOU which he will likely put into circulation (borrow against it, trade it etc.). Monetary supply just increased by $50.

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