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How can money be both devalued and expensive? (lemmy.ml)

submitted 2 months ago by fractal_flowers@lemmy.ml to c/asklemmy@lemmy.ml

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An acquaintance who works in finance said that the USD was devalued during COVID but hasn't yet experienced much inflation except in household goods because money is still expensive. What does that even mean? How can money be expensive? And how does that differ from being valued/devalued?

I would think "money is expensive" means something along the lines of "there isn't much liquid cash", but I thought the money injected into the economy was liquid cash.

Would someone more into finance/trading than me explain how this is possible? Thanks!

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[–] HubertManne@moist.catsweat.com 13 points 2 months ago (1 children)

you can think of the prime interest rate as being the cost of money. high interest rate money is expensive, low and its cheap. Because its the cost of the loans. Its actually not expensive now I would call it about normal. we have been running cheap for a long time now before recent times. at or just above zero.

[–] NABDad@lemmy.world 6 points 2 months ago (2 children)

Whenever anyone talks about how high interest rates are now, I remember when my wife and I bought our house in 1997. We were pre-approved for a 30-year fixed rate mortgage at 7.5%, and we were told to take it.

What we were actually told was, "you'll never see a rate this low again.

[–] deegeese@sopuli.xyz 7 points 2 months ago

To be fair, at the time that was the best rate seen in the previous 20 years.

[–] HubertManne@moist.catsweat.com 3 points 2 months ago

My student loans was double digits at one point.