Erm... because a drop in prices should increase demand?
Which would work if the problem was no demand. But as far as I understand it, there's plenty of people and businesses who want to borrow. It's just that nobody will lend them anything.
And a drop in prices reduces supply even further.
I can't see interest rates going negative. If they did, surely whatever's left of the financial industry would just disappear?
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timeasmymeasure
no subject
Date: 2009-01-09 08:59 pm (UTC)Which would work if the problem was no demand. But as far as I understand it, there's plenty of people and businesses who want to borrow. It's just that nobody will lend them anything.
And a drop in prices reduces supply even further.
I can't see interest rates going negative. If they did, surely whatever's left of the financial industry would just disappear?