bitcoinstr on Nostr: Problem: Economists don’t understand negative interest rates. So let’s say #BTC ...
Problem:
Economists don’t understand negative interest rates.
So let’s say #BTC has an interest rate of say -4.0%.
What that means is that if I borrow 100 #BTC from you today, then I will have to pay you back only 96 #BTC next year.
But from my perspective that wouldn’t make sense, I would just hold it for another year and pay you back 92.16 #BTC. Driving that to its logical conclusion I hold for 50 years and only owe you 1BTC
Understanding negative interest is mind boggling for most economists.
Now this is why capital gains tax is unjust. Your capital asset (house, farm, etc) never became worth more, the dollar just weakened. But needless to say the GOV even wants a portion of your weaker dollar.
Economists don’t understand negative interest rates.
So let’s say #BTC has an interest rate of say -4.0%.
What that means is that if I borrow 100 #BTC from you today, then I will have to pay you back only 96 #BTC next year.
But from my perspective that wouldn’t make sense, I would just hold it for another year and pay you back 92.16 #BTC. Driving that to its logical conclusion I hold for 50 years and only owe you 1BTC
Understanding negative interest is mind boggling for most economists.
Now this is why capital gains tax is unjust. Your capital asset (house, farm, etc) never became worth more, the dollar just weakened. But needless to say the GOV even wants a portion of your weaker dollar.