Part 5/10:
While theoretically, an acceleration in the velocity of money could help alleviate this disparity, the impending reality of rising interest rates complicates matters. For the last 40 years, interest rates have been on a downward trajectory, diminishing borrowing costs. However, as rates begin to rise, maintaining existing debt while managing new loans could become unmanageable for many borrowers.
The Four Paths Forward
As we face the realities of this unsustainable situation, four potential pathways present themselves, each with unique implications: