From a practical viewpoint, everyone thought zero was the lowest level for interest rates. Today, between 20 to 25% of all government bonds come in negative interest rates, meaning that you’re paying the government so that it borrows money from you. What cautiously helped you to make money before now just brings you with what’s considered the safest place to shelter your money. This world upside down could be the most worrying consequence of the 2008 financial crisis.
Quantitative easing has created unprecedented amounts of cash, so much that stock markets are at risk of overdose, instead of fueling the real economy and generating so needed inflation, cash is being largely invested in what seems the most appropriate and apparently less risky investment so far. Against the backdrop, the growing fears of a lasting slowdown in economic growth in Asia and a higher risk of a Japan-like deflation in Europe. If lending money doesn’t pay anymore, what will?