Stocks fall due to low bank rate

The Courier-Mail - - LETTERS -

IT’S not ris­ing in­ter­est rates that are caus­ing the US-led mar­ket cor­rec­tion ( C-M, Oct 12).

It is be­cause in­ter­est rates have been too low for too long.

This has caused an over-in­flated bub­ble in stock and prop­erty mar­kets as in­vestors chase prof­its there.

Bub­bles are start­ing to burst. Higher in­ter­est rates will en­cour­age more sav­ings and less in­cen­tive to bor­row.

Bor­row­ing is cre­at­ing dan­ger­ous lev­els of debt, as we saw be­fore the 2008-9 global fi­nan­cial cri­sis. Reg Strutt, Kippa-Ring

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