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To: Oblomov who wrote (46231)	12/11/2000 4:21:28 PM
From: eddieww	Read Replies (1) \| Respond to of 436258

"If the demand for cash is high (as would be the case in a debt crisis)..." Why would there be a demand for cash if cash is being made plentiful. Wouldn't there rather be a demand for further extension of credit as a way to avoid default, albeit at a higher rate to the lender? I bought an earlier house in the late '70s and there was no shortage of lenders willing to supply me credit at the higher interest rates of the time. Quick addition: If lenders stop lending in an inflationary environment then they are stuck with only the previously made, lower interest loans they are carrying. In inflation, they must loan more at the new, higher rates if they are to make a profit instead of a loss, musn't they?