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on point

(2,506 posts)
2. Interesting question, but perhaps not much. It is about 'real' rate and not 'named' rate
Tue Mar 17, 2015, 10:32 AM
Mar 2015

The nominal rate of interest may be 5 %, but if inflation is 4.5% then real rate of interest is .5%.

Same if interest rate is 1%, and inflation is .05. Real interest is .5%

There are questions of course about what are inflation is, because a lot of things people buy don't seem to get counted well, like healthcare and education.

And the inflation rate is massive for stocks and commodities, because we basically have the wealthy bidding up assets with their excess capital. eg Stock market is not really rising, but is being inflated with excess capital, that should really be taxed away instead.

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