Day Trading Stocks & Futures

Investing in a Negative Interest Rate World

https://awealthofcommonsense.com/2019/08/investing-in-a-negative-interest-rate-environment/

As more and more global bonds go into negative yields, money will chase EM bonds like India and lower the yield....the unsuspecting pensioners in india mostly living off FDs and without a social security net can be the hardest hit by this coming hurricane.. :(:(
Pensioners need high interest to survive when inflation is high because otherwise they'll use up their savings faster but in the long-run, interest compensates for inflation, so if interest is low for a prolonged period then that means inflation will be low, that's how market-equilibrium corrects itself against the manipulation of government, & if inflation is low, then pensioners will be using up their savings slowly, so they mayn't necessarily need high interest on FDs to survive.

Let's look at the typical Japanese example -

Japan Interest.png




Japan Inflation.png
 

XRAY27

Well-Known Member

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