I don't understand the concept. why does Japan have <1% interest rates, and we are crippled with 9-10 %+ at times. If spending goes down so does the economy, why aren't the rates adjusted according to spending. people are forecasting <2% interest rates, I'm thinking if things get real bad next year, they will keep going down, until it hits a point where the economy is going again. But my question is why do they let the economy fail first. Why not keep it in check. Obviously you don't need to be a rocket scientist to work out with the 10-15% gains in property a year, people borrowing to 90% of their threshold, for interest rates to go up 2% there would be a lot of people under pressure. that means, then those people have to cut spending to keep their homes, now if a great deal of the population are doing this, all of a sudden we are in a recession. I think there is a problem with property explosion. Prices being driven up, another factor I'm yet to understand. I'm understanding with interest rates low, more people buy homes = more debt. Why not keep the interest rate low, but keep loan ratio at no greater than 90%, instead of crippling people. I really need some help understanding this.