But with rising oil and commodities prices, inflation will stay high and they cannot lower rates. Remember that 7% is our usual interest rate, so we should not expect the once-in-a-lifetime 1%-5% rates to come back. The low rates were an anomaly.
Your certainty continually amazes me. What you state is plausible, not certain. I would go as far as to say that it’s not even probable.
I’m not certain of how things will play out on a macro level but you ought to consider these questions.
Is it inflationary if noone is borrowing regardless of commodity prices?
Will growth in demand for oil and commodities continue in the face of the severe recession you predict? Please explain how you get to $200 oil in a recession.
Is it possible that the higher interest rates of the 70’s through the 90’s are the anomaly?
