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In fractionally reserved economies however, when interest rates are manipulated lower artificially and money & credit creation is continuous, lower interest rates benefit those entities that are closest to the central bank first.

True.

This results in high barriers to entry in business and industry, industrial overcapacity thus the misallocation of resources and, eventually, the unnecessary depletion of natural resources. All through this process, the cost of living rises paving the way for gradually more onerous fiscality.

I would argue that because debt is nominally lower, the barriers to entry are lower. Because there are many new entrants, resources are increasingly used. However, because demand has not driven the creation of the business profit margins are low.

These profit margins will be higher than the low cost of capital [nominal cost of debt] but should the nominal rate rise, the business will be required to liquidate, unless demand for their product rises. A liquidation releases factors of production back to businesses that have higher profit margins – demand.

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