Impact of Declining Interest Rates on the Economy and Investments

This chapter explores the significance of a 2000 basis point decline in interest rates over 40 years, highlighting its various positive impacts on the economy, consumer demand, profitability of businesses, asset values, cost of capital, and default rates. It discusses the cycle of stimulative rate cuts leading to risky investments, eventual losses, economic contractions, and the end of the era of easy money policies, predicting changes in investment strategies and investor sentiment in the future. The chapter features a panel discussion on finding relative value in the current market environment, emphasizing the need to adapt to the evolving investment landscape.