segment on 60 minutes ronight, page-14

Fletch,

not everyone is wealthy or in a position where they dont need to own a house or car.

when interest rates are low, people always run up debt, ie credit cards, or large mortgages.. its this spending which push's up inflation.

look at how well the banks did over past years, mostly accounted to money made on interest..

When interest rates are high, most of poeples money goes to paying of their debts then, or people are less likly to spend due to the cost of credit.

few people save up and buy, most always buy on credit..

this is why upping interest rates slows inflation.


oh and Warnie, will look forward to seeing your posts in 12 months time.. you will probably still be talking up housing