Over-65s, a large and growing demographic in Europe, are cutting their spending at worst possible time as NIRP eats into savings, pensions, investments, and annuities.
Something funny’s happening in NIRP land: long-term yields are rising, negative yields are turning positive, and investors are getting punished for having handed their brains to central banks.
Yield-starved banks expanded lending to “relatively high-risk businesses” and to the property sector, as the Bundesbank considers house prices in many cities overvalued by 15% to 30%.
After peak negative-yield-absurdity in August, bond prices fell – the “bond bloodbath” – and the mountain of bonds with negative yields has plunged by $5 Trillion, or by 30%, despite rate cuts.
