Friday, March 11, 2016

Day money Baugeld, Gold: What the interest rate decision of the ECB means – THE WORLD

For some he is “Super Mario”, for others the gravedigger of the German savings culture. It is clear that Mario Draghi once again all was puzzled.

The ECB is expanding its controversial bond purchases, from 60 to 80 billion euros a month. They also tightened the penalty interest rate on bank deposits and presses the key rate for the first time in history to zero.

credit institutions that deposit their money at the ECB, must in future pay a penalty of 0.4 percent. Previously it was 0.3 percent. The ECB wants to fight deflation and bring financial institutions to lend more and thus to push the European economy.

“The Central Bank is in the final” says the known investor Professor Max Otte. With the introduction of negative interest rates, the monetary authorities had entered the terrain of monetary destruction.

For investors and consumers, this means a huge change. The “world” designates the impact of monetary tsunamis. Saver, builders, workers and investors are affected in different ways

day money rates sag

the Brachial ECB policy negates any hope that the credit rates rise again in the coming years. But the now spiked to 1.74 trillion euros bond purchase program will ensure that the financial sector extremely much money is available. Especially since QE – so the technical term for the purchases – now includes good corporate bonds. So the banks have no incentive to attract more client money.

Already, the conditions for savers are very bad. The finance portal Biallo does an average overnight rate of 0.29 percent: ie 10,000 euros bring all Euro interest 29 a year. In this average but flowing attractive promotions from online banks, most retail banks offer significantly less, some are already at zero percent. “The interest rates on savings products will continue to fall tend,” said Carsten Brzeski, chief economist at ING DiBa.



charges on current accounts rise

In worse conditions also holders of current accounts must set. While most banks are likely to shy away from passing on the minus ECB interest rates one to one to their customers, account holders should ensure with rising accounting fees and other costs for financial services expected. “Negative interest rates are savers probably need not fear,” said Brzeski.

In a direct transfer of negative interest rates, the customers would run away in masses. Even now, the tendency to cash holdings in the Federal Republic is large. “One should nevertheless keep hidden cost increases in the eye,” advises the Economist.



builders into debt cheaper than ever

While savers suffer, the home builders can look forward. The cost of real estate loans are lower than ever. fall on ten-year loans averaged only 1.35 percent interest on, as is apparent from Biallo data. Anyone wanting to build or buy now, but comes rather late. there is cheap money in Germany for a while, and has made attracting property prices, especially in the cities strong.

Photo: Infographics world

Especially in the cities exaggerations are not to be overlooked. The proportion of disposable income, have to spend the average income for living is, skyrocketed. This points to the growing danger of bubbles. Experience from other countries shows that a real estate boom may take longer than it was held at the beginning possible.



Gold benefits

The flood of money makes rising prices probably also in other property. The most famous mobile real value – gold – quoted on Thursday at 1145 EUR per troy ounce, and thus in the vicinity of a twelve-month highs. But since the beginning of the precious metal has risen by 17 percent. On the commodity markets, with the dollar as a trading currency is decisive, gold was quoted at $ 1263rd “A price per ounce $ 2,000 is in this environment is not unlikely,” the investor Otte says.

Gold investors but should be aware that the ECB is not the only central bank is that influence the price. The gorilla at the international level is the US Federal Reserve. Should the Fed against the ECB to raise interest rates, which could bring pressure on the price per ounce, at least temporarily. Gold and cash should from the perspective of Otte already therefore have a role in the investment, because the central bank to intervene more and more in the ability of individuals to the negative interest. However, savers should also reinforced invest in productive values, namely shares.



equities disappoint hopes

The impact of cheap monetary policy on the stock market are less clear than is often assumed. The idea that banks take the cheap money to speculate in the stock market and so drive prices, falls short. Because the behavior of financial institutions is not only determined by the ebb and flow of liquidity, but above all by the extensive regulation – that is, by the rules, such as banks may actually invest their money. Whether the stock market securities may rise or fall, depends primarily on how to develop corporate profits and follow the economy.

This year, the German stock index , also because the earnings expectations of companies have darkened ten percent in the red. However, those who in 2009 got in, always can not look forward to half times as high rates. A solid dividend yield of three percent suggests that Dax securities not quoted all concerns despite excessive. With or without bond purchases – if the world economy continues its growth, the company’s shares will continue to be a good investment

Ulrich Stephan, chief investment strategist at Deutsche Bank advises. “the now heralded zero interest phase should encourage private investors to reconsider their asset allocation and to invest more in equities, despite last higher volatility in the markets.” In the short term, however, no great leaps are expected. “Investors will wait and see and see if the ECB’s measures really have a positive effect on the economy in Europe,” says Mitul Patel, interest rate strategist at British investment company Henderson. In the past, this was often not the case.



life policies less attractive

The biggest distortion has the ECB’s monetary policy caused in the bond markets. Around three quarters of all government bonds and bonds bring computationally already a negative return. Investors who hold these securities, thus losing money. Nevertheless, there are numerous institutions that need to purchase these debt securities on and buy some. Even solid corporate bonds throwing now hardly anything from.

Photo: Infographics world

This suggests the return of life insurance by which primarily invest in such securities safe. Under the aegis of Draghi is nothing to suggest that the interest on life policies could improve in the coming years. Last year, the interest rate has already fallen on the savings to less than three percent. The trend is decreasing.



health insurance are more expensive

Even privately insured may be prepared that their tariffs deteriorate. Like other large institutions have paid minus interest insurance. These costs they give to their customers.

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