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by imtringued
2743 days ago
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The interest doesn't disappear, it lands in the pocket of the lender, only the principal does disappear. If you do indeed lend 100k$ from a central bank and they "print" the money then the money supply increases by 100k$ for the duration of the loan. When you pay it back the money vanishes into nothingness again. Interest payments go to the central bank which makes a profit, governments spend the income and the money starts circulating within the economy again. [1] [1] https://www.ecb.europa.eu/explainers/tell-me-more/html/ecb_p... |
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