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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (77753)4/16/2008 9:01:51 PM
From: SouthFloridaGuy  Read Replies (2) | Respond to of 116555
 
Depends on what your definition of inflation is. Last I checked people's wages aren't going up so if they are already over-burdened with debt service, not sure how interest rates rising solves anything.

It's like stabbing somebody who has already been fatally shot.



To: koan who wrote (77753)4/19/2008 9:44:21 AM
From: Sr K  Read Replies (2) | Respond to of 116555
 
>>If inflation is 10%, interest rates need to be 12% or 13% to make up for the lost value of the debased currency. In a pure capitalist world-lol.<<

If payments are made more frequently than annually, your thesis is wrong.

For quarterly loan payments, 6.5% would be profitable, and 9.5% would have a usual margin -- "if inflation is 10%"


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