In this virtual trade of this year's crops for titles to future years'
crops we shall get a high price for the former and pay a low price (in
present valuation) for the latter. Investment securities are, and will
be, a drug on the market. In other words, the rate of return to the
investor will be high; the rate of interest on long-time loans will be
high and stay high, that on short-time loans may fluctuate greatly. The
rise in the rate of interest on long-time investments is one of the most
vital and far-reaching effects of the war. At bottom, interest always
arises from the exchange of present and future goods. The rate of
interest, as I have tried to show in my book of that title, is simply
the crystallization, in a market rate, of the impatience of the human
race for its bread and butter. War has now produced such impatience in
populations of hundreds of millions. It is this impatience which dumps
the securities upon us, sends down their price, and sends up the rate of
interest. As Byron W. Holt has said, there is no moratorium for hunger.
The fall of securities in Europe produces the like fall in this and
other countries.
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