Such considerations, even though they are not explicitly present to the minds of the business world, are far from being academic. The business world may speak, and even think, as though the money rate of interest could be considered by itself, without reference to the real rate. But it does not act so. The merchant or manufacturer, who is calculating whether a 7 per cent bank rate is so onerous as to compel him to curtail his operations, is very much influenced by his anticipations about the prospective price of the commodity in which he is interested. Thus, when prices are rising, the business man who borrows money is able to repay the lender with what, in terms of real value, not only represents no interest, but is even less than the capital originally advanced; that is, the real rate of interest falls to a negative value, and the borrower reaps a corresponding benefit. It is true that, in so far as a rise of prices is foreseen, attempts to get advantage from this by increased borrowing force the money rates of interest to move upwards. It is for this reason, amongst others, that a high bank rate should be associated with a period of rising prices, and a low bank rate with a period of falling prices. The apparent abnormality of the money rate of interest at such times is merely the other side of the attempt of the real rate of interest to steady itself. Nevertheless in a period of rapidly changing prices, the money rate of interest seldom adjusts itself adequately or fast enough to prevent the real rate from becoming abnormal. For it is not the _fact_ of a given rise of prices, but the _expectation_ of a rise compounded of the various possible price-movements and the estimated probability of each, which affects money rates; and in countries where the currency has not collapsed completely, there has seldom or never existed a sufficient general confidence in a further rise or fall of prices to cause the short-money rate of interest to rise above 10 per cent per annum, or to fall below 1 per cent.[6] A fluctuation of this order is not sufficient to balance a movement of prices, up or down, of more than (say) 5 per cent per annum,--a rate which the actual price movement has frequently exceeded. [6] The merchant, who borrows money in order to take advantage of a prospective high real rate of interest, has to act in advance of the rise in prices, and is calculating on a probability, not upon a certainty, with the result that he will be deterred by a movement in the money rate of interest of much less magnitude than the contrary movement in the real rate of interest, upon which indeed he is reckoning, yet is not reckoning with certainty.