I do however think that the million dollar club will be affected as well but with a little bit longer lag. Many business people, especially, the nouveaux riches, who bought in the last 5 years have Interest Only loans or Option ARMs. Business people are the type who generally think why leave millions in my house when I can leverage that money in my business? Actually, the exotic loans were designed for such people (not for middle-class salaried buyers). Businesses depend on easy money. Without it, you’ll see some major retrenchment.
I think that the majority of adults don’t remember a high interest rate environment and won’t know how to deal with it. I once met a British woman who told me she missed Thatcher, the “good old days of 15% from her savings account.” For elderly people with assets and no debt, high interest rates is an ideal environment.
