week 2 discussion 75

Interest rates have a way of rationing credit dollars to those projects that promise the better returns, while low returning projects are not undertaken. One result may be that the businesses, and country thereof, are allocating funds to the projects that have the prospect of impacting GDP the most, & thereby raising the general ‘wealth’ of the business/country. With interest rates being at long-term historical lows, are we at risk of investing in ultimately poorly performing project because the cost of capital is so low? Will the interest rate environment change soon? Do you anticipate inflation in the next decade?