[taejo]

> The debtor explanation seems like it would be fine to me because it seems like lenders would not be likely to want to renogotiate their loans every time the money is debased,

The paper doesn't explain this in the clearest way, but they do have a strong incentive to negotiate: they can capture some of the money that the debtor would spend on seignorage.

Suppose Dave owes Carol 5 francs, and that old franc coins contain 4 oz of gold, while new francs contain 2 oz gold. So Dave can take 3 old francs (= 12 oz gold), convert them into 5 new francs (= 10 oz gold, with the mint taking 2 oz gold in gross seignorage) and pay off his debt that way. But if Dave and Carol renegotiated, Dave could pay only 11 oz of gold, and they'd both be 1 oz of gold better off than if Dave had paid his debt in new francs.

[empath75]

Many years ago, I went to credit counseling because I was just stupid with credit card debt in my early 20s. The credit card companies instead of negotiating with me, raised my payments. I declared bankruptcy and they got nothing, instead.

I don't think that debtors in lenders were any better at negotiating in the middle ages than they are today. When you're a debtor, and you know you can get 'free money' by going to the mint, why would you bother negotiating with someone (a lender) who has an incredible amount of power over you.

[taejo]

Why wouldn't the creditor offer to accept 11 oz of gold rather than waiting for the debtor to come to them with 10 oz that they have to accept?