5-10% INTEREST RATES BOOST PRODUCTION

 TWITTER THREAD HERE


INTEREST RATES BOOST PRODUCTION

Look at the graph of US interest rates.

Can you spot the most prosperous and productive period of history since the 70s?

1/


The most productive period in US history post WW2 was when rates were 20%, US kept thriving when rates were kept above 5%.

But why?

Why do high rates spur production?

2/


Simple, folks.

You DO NOT have to borrow money to start a business.

To reiterate, YOU DO NOT HAVE TO BORROW MONEY TO START A BUSINESS, when rates are above 5% permanently.

3/


Why?

Because medium level rates, 5-8% make it impossible for the financialization of commodities.

Commodities would be used ONLY for productive deeds, not as money in shadow banking rehypothetication.

5/


Cheap commodities and cheap energy makes makes possible to boost an economy WITHOUT DEBT.

Let me reiterate:

Cheap commodities and cheap energy makes makes possible to boost an economy WITHOUT DEBT.

6/


Let me reiterate:

Cheap commodities and cheap energy makes makes possible to boost an economy WITHOUT DEBT.

YOU DON'T NEED MUCH DEBT to  start, run and expand a business when COSTS OF DOING BUSINESS ARE LOW.

7/


YOU DON'T NEED MUCH DEBT to  start, run and expand a business when COSTS OF DOING BUSINESS ARE LOW.

Most operations will be self funded, without need for debt.

Expansions would require little debt as well.

8/


The Government CAN do major infrastructure plans ONLY IFF commodities and energy are abundant (cheap).

Let me reiterate:

The Government CAN do major infrastructure plans ONLY IFF commodities and energy are abundant (cheap).

9/


5%-10% interest rates are an immense incentive to create businesses as the dreams of making money from money would spur human animal spirits.

10/


So, to summarize the effects of 5-10% rates:

1) Cheap commodities and energy

2) Low Cost of doing business

3) No need for much debt to do business

4) Financialisation of commodities goes to 0, because 5-10% rates is far too high a profit, can't be made via rehypothetication

11/


6) Animal spirit of making money from money would spur people produce excessively to save money, hence rise of prosperity.

PROSPERITY = ABUNDANCE

12/end


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