INFLATION RISKS
DANGER OF “CHEAP" MORTGAGE MONEY Interest rates will not always remain low, and the committee thinks that those responsible for the administration of this new institution, if formed, must be particularly on their guard against having to refinance their bond issues at high interest rates, while the corporation still has a large proportion of its funds locked up in longterm advances at low rates. Fluctuations in interest rates will automatically bo reflected in the Stock Exchange prices of the corporation’s bonds, certainly- to the embarrassment of the bond holders and possibly also to the embarrassment of the corporation.
The more successful the corporation is in raising cheap money from the public and lending it to farmers, the greater will be the very grave risk of an Inflationary increase in land values, and an unjustified speculative boom in land. The greatest care should be taken not to increase artificially the current market price of land.
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Evening Star, Issue 21945, 4 February 1935, Page 7
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156INFLATION RISKS Evening Star, Issue 21945, 4 February 1935, Page 7
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