Forum Archive Index - July 2001

["Malcolm Cameron" <malharcameron@hotmail.com>]

Derek
there is a limit to low income people borrowing money to purchase goods to 
keep big corporations in profits and where are they without customers.look 
what has happened in america with a little correction because there is too 
much debt, and poorly conceived business plans because peeople trying to get 
a reasonable return on money are looking at every hair brained scheme with 
rose tinted glasses.with high interest rates the dot com boom & bust would 
never of happened.you may have made money Derek but most people lost 
heavily. when in business in the high interest rate period I could borrow 
money at 3% more than I could get for it. As interest rates came down the 
margin gradually increased to 7% because they had more customers wanting to 
borrow to do in many cases stupid ventures. so that a slight increase in 
interest rates sends them broke. if you borrow at 16% you make sure your 
sums are correct. the foreign currency loans of a few years back are a good 
example. cheap rates so they did not think it through properly. High 
interest rates would also keep a lot of NZ money in NZ instead of chasing 
higher returns elswhere
Malcolm Cameron



>From: Derek <dkw@paradise.net.nz>
>Reply-To: sharechat@sharechat.co.nz
>To: sharechat@sharechat.co.nz
>Subject: Re: Re: [sharechat] Re: Goodall and heroic... interest rates
>Date: Sat, 30 Jun 2001 19:51:49 +1200
>
>Correct me if I am wrong but high interest rates do 2 things that are
>extremely negative.
>
>1) Transfer New Zealands wealth to overseas investors (a truly stunning 
>idea).
>2) Inhibit growth (another truly admirable goal!).
>
>They also keep inflation down which seems to be the main aim, still its
>easy to stop inflation by burning money & opportunities. Harder to do it
>another way - that would require imagination!
>
>Regards,
>Derek
>
>
>
>
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