Interest Rates and the Nature of Profit | The Twilight of Gold Series | Episode 12 (WiM186)
The "What is Money?" Show
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The Austrian School of the Business Cycle
In a credit inflation, the price of all goods rise but the prices of capital goods rise faster than consumer goods. So if interust rates get artificially lowered, then that costs entrapenurs to take out more loans over borrows. And they bid up the cost of capital goods relative its all about relative nt matter what the number is. Since contra penurs and businesses borrow much more than like consumers who are just consuming, then as capital goods get bit up, profit is squeezed.
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