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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: AC Flyer who wrote (48927)	4/22/2004 7:00:43 PM
From: Maurice Winn	Respond to of 74559

Hi ACF, I re-read what I wrote and it was as though things would get bad. My analogy ran away with itself. What I really meant was that as interest rates rise, gently, more like a greenhouse warming causing a sea level rise, people with too much debt would find themselves underwater and would be dispossessed of their property, which they will have to sell at whatever the market will bear. That will have effects at higher elevations, even though the higher elevation people won't actually get their feet wet. For example, companies selling luxury goods to people using low interest debt to buy those goods will find their sales diminishing. The interest rate increases will reverberate around the world and everyone will have to adjust, not just those with debt. Those positioned in things which will do well in high interest rate environments combined high commodity prices will find sales going well. Cyberphones for example, which are being bought like crazy, will be unaffected. SUV sales will probably decline as cash flow squeeze meets capital cost and operating cost. Anyway, it'll be a slow-motion squeeze, not a bolide in the Pacific. I got carried away! It's just that I've been waiting 3 years for this part of the process and I'm sick of waiting. I suppose I'll have to wait another 3 years for Uncle Al to get his rates back up to something like 7%. Maybe more. I didn't mean to suggest a big implosion or anything like that. It just read like that. But I would NOT want to be at sea level with big debts as the interest rates start rising inexorably. We cash holders have suffered over the last 4 years. Now it's the turn of the debtors. About time too if you ask me! Mqurice