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Originally Posted by Cube Inmate
A major point you're missing is that if people are worried about interest rates affecting their lifestyle, then the ALREADY don't have enough money to keep up with their lifestyles. They have enough credit to keep up with their lifestyles, which is a totally different thing. A memorable quote I read somewhere:
"Being able to afford the payments does NOT mean you can afford the item."
If you increase interest rates, availability of credit decreases. Demand for consumer goods follows.
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thats fair comment, but you know thats not it works (people will spend on credit to keep up).
so how is this good for the average joe though? demand going down i fail to see as a good thing. wouldnt that mean less jobs in the manufacturing and supply chain industries? less people working at lower incomes and restaurants, bars and other hospitality industries take a hit. its a cycle that i dont see as being good for anyone.
wouldnt it be better to have the problems we see in Calgary right now and not hope to solve it by raising interest rates?