Quote:
Originally Posted by Bill Bumface
People will run out of money, and their capacity to borrow is dropping with the increasing interest rates. That happens, but is fairly short lived unless wages are somehow keeping up (in which case, people will also stop buying fearing future price increases, as it becomes normalized).
|
If wages are keeping up it is 100% rational to do as much spending as you can as soon as you can. If that 30k car is going to be 34k next year, buying it now makes sense even if rates are high.
Once enough people start doing that it effectively increases the supply of money because the velocity of money is much higher.