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Most people look at interest rates backwards. They believe cheaper interest rates leads to more lending. Hence the notion that higher interest rates lead to economic pullback.
In this video I discuss how it is the prospects of the economy which determine whether borrowing is undertaken. The key is whether a return is available. If one is going to make75%, then a 25% rate is a done deal. If however, there is no money to be made, a 1% loan is too expensive.
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