What happens when interest rates rise?

Emberfire
Emberfire

Well?

Flameblow
Flameblow

Less loans

SniperWish
SniperWish

@Emberfire
Costs me more to borrow stock.

BlogWobbles
BlogWobbles

@Emberfire
Government gets fucked. What they will do is keep interest rates so low for so long that the next crash will be devastating when it eventually happens.

LuckyDusty
LuckyDusty

@Emberfire
2008 2.0

RumChicken
RumChicken

@BlogWobbles
What this user is trying to say is "B-BUY GOLD AND SILVER!".

iluvmen
iluvmen

@Emberfire
High interest rates = cost of borrowing rises = people take out less auto loans and mortgages = economy slows down

Low interest rates = cost of borrowing falls = people and businesses take out more loans = more economic growth

BunnyJinx
BunnyJinx

@SniperWish
lol k

Nude_Bikergirl
Nude_Bikergirl

@iluvmen
economy is shit
interest rates have been near zero for the past decade

negative interest rates here we come

PackManBrainlure
PackManBrainlure

@iluvmen
Low interest rates
inflation and peoples savings become worth jack shit
everyone in debt
economy slows down
only thing moving is the housing bubble
banks burning but "saved" by the government

High interest rates
loans more expensive, prices on housing drops, debt decreases, savings matter
people dare buy stuff they don't really need
can afford a home and even pay back the loan
strong dollar
economy grows

Two can play this game

CodeBuns
CodeBuns

@iluvmen
Hi Yellen

Stupidasole
Stupidasole

@PackManBrainlure
people dare buy stuff they don't need

Are you saying that people will have more money during a high interest rate environment?

Quality thread, btw. Good going op.

FastChef
FastChef

@BlogWobbles
this is misinfo

StrangeWizard
StrangeWizard

@iluvmen
he thinks interest rates are the policy tool we need - this time it will work, for sure!

Methnerd
Methnerd

@PackManBrainlure
could you elaborate on your High interest rate points

DeathDog
DeathDog

@Emberfire
People who are highly geared without cash reserves to service the loan either take a loss or go broke.
On a large scale, lots of mortgagee sales can effect housing to such a degree the LVR gets shifted meaning the home owner may have to top up the mortgage with a cash payment in a short amount of time or risk foreclosure.

Soft_member
Soft_member

@PackManBrainlure
the opposite of what textbook teaches you.
but this is what happens

viagrandad
viagrandad

@Stupidasole
i would say yes. less debt = more money.
and saving will be encouraged

Poker_Star
Poker_Star

@Emberfire
since nobody here mentioned its all relative to the natural rate of interest in the economy ill assume u are all retards

Lunatick
Lunatick

@PackManBrainlure
except there is no significant inflation today

everything else I fully agree kek, what irony.

hairygrape
hairygrape

@PackManBrainlure
Stinulative monetary policy, is by definition, stimulative.

massdebater
massdebater

@Poker_Star
What happens when interest rates rise?
its all relative to the natural rate of interest in the economy

That's not really a definitive answer.

askme
askme

@Poker_Star
The natural rate of interest is zero in our monetary system.

Supergrass
Supergrass

@massdebater
probably cause there isnt a definitive answer?

Need_TLC
Need_TLC

Stock market goes up

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