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 to pay 5 per cent. interest and £100 per cent. in capital in two years' time is less likely to fall far below par than the obligation of the same debtor to pay 5 per cent. interest with no obligation to pay the principal ever, or before, say, 1965.

And vice versa, when money is plentiful and cheap because trade is slack and commodities are low in price, and consequently need less money to finance those that have not yet found their final purchaser, then securities rise because the spare money is invested in them; and the long-dated or perpetual variety will rise faster than those which must, or may, be redeemed shortly.

Consequently, those who can make accurate forecasts concerning the future movements of trade, which expands and contracts, or has hitherto done so, in more or less regular cycles, can make profits by jobbing in and out of fixed-rate investments, from the long-debts to the short ones; or from fixed-rate investments which rise in time of slack trade, to industrial shares and other owner-securities which rise in time of active trade owing to the larger profits that their holders then expect to earn.

For the ordinary investor it is very doubtful whether it is advisable to take part in this form of speculation, for it is nothing else. It is