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Gangsta's Paradise

The Compound and Friends

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The Effects of Floating Rate Debt on the Economy

In 1994 and 1995, the Fed managed to slow the economy gently without plunging it into a downward downturn in what is perhaps its most famous successful soft landing. If people have fixed rate debt that's very low, you can't have a recession. The economy is much more susceptible to interest rates when a lot of it is floating. And I know that corporations, their debt is much more locked today fixed than it was back in the day.

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