SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Idea Of The Day
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Oak Tree who wrote (31457)5/16/2000 4:07:00 AM
From: IQBAL LATIF  Read Replies (1) of 50167
 
Change in interest rate impacts the industrial production and capacity utilisation that is my premises, going by medium term evidence whenever we have seen spate of interest rate hikes we see a fall in capacity utilisation as you can see in the chart.

Now what has happened is that to higher pace of capcity growth that is the ability to produce more I am making a point that 'bottle necks' will not be created, it is considered that above 84% of capacity utilisation producers will face constraints hence bottle necks are created, in my opinion if present set of interest rate hikes lead to a slow down we may see that due to higher level of idle capacity the impact on corporate profits would be huge, look at 198-90 period, if we go through that kind of fall slowing of economy could be far more painful.

The other point I have made in htat post is that higher level of capacity growth and higher level of cpacity utilisation and lower purchase prices indicate a very productive and virtuous economic cycle, if INTC spends 6 billion on fabs it is not consumption it is non-inflationary productive expenditure, all these latest fabs increase potential productivity. To slow this economy down by trying to define these new developments from old theories may lead us on to 'killing the goose that lays golden eggs'..

I hope this will help you understand the point I was trying to highlight.. best regards,,
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News