Australian Investment Blog

Comprehending negative interest rates and potential ramifications

The weather on the weekend showed us again that nature is the real boss, with Sydney experiencing +35 degrees one day, heavy rain the next and New York is bracing for 2 feet of snow. Let’s consider further how Central Banks are attempting to meddle with the natural order of things. I have mentioned a number of times previously, the negative interest rate scenario recently but what does this actually mean:

• A number of countries like Germany, France and Japan are basically get paid to borrow money in the bond market. Imagine Commonwealth Bank (CBA) paying YOU interest on your mortgage…that would be nice, imagine property prices then!