the change in the rate of interest paid on that ration does not determine
the amount borrowed for non constrained borrowers except in the speed of recycling
of the existing stock of debt owed
its a stock flow adjustment not by itself an indication of the rate change
causing a knock on change in plant and equipment investment plans
the credit constrained aspect is of course purely a function of ration changes
tied to adjusted threshold requirements
the knock here is of course any increase in collateral values
or operating margins due to brisker product markets
think lot values and the bubble feeding loop between borrowing standards and amounts and changes in the two impacting sales prices and lifting collateral value higher still
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all this cartooning and stick figuration is in the service of cyclopian macro
the FED board as great helm..... persons
the models ?
mystification thru stupid logic tricks
