Bridger PenningtonFund Launch & Investment Expert

How Inflation Destroys Debt - Part 2👀 #shorts

1 Sept 2022 · 1 min

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Bridger Pennington explains how inflation erodes debt's real value. If the US owes China $1 trillion and inflation hits 10%, that debt is worth only $900 billion in real terms. Inflation essentially lets borrowers pay back less than they owed.

Chapters

Another example how inflation destroys debt. So let's say you're the US government and you owe China a trillion dollars and you start to inflate your currency. You start printing more dollars and you inflate your currency 10%. What that means in real actual sense is, yes, you still owe a trillion dollars to China, but really it's only worth about $900 billion right now because you've hurt the purchasing power of your dollar by 10%. So, because of this, inflation allows us to pay off old debts with today's dollars. Inflation is one of the greatest destroyers of debt.