So the ECB lowered their interest rate today, in a move that saw the interest level drop to a staggering -0.5% …(yes that is a minus sign). Shortly after, the head of the national bank of denmark followed up, with a move down in the danish lending rate to -0.75. (Again, yes a minus sign).
Basically, due to the healthy danish economy, and the peg of the danish kroner to the euro, we are forced to maintaining a lower interest rate then all of our peers around us. In effect we are saying – enough, please please please down put your money here, go away, we are awash in cash.
So there we are, still basically applying a tax on savings in Denmark, and all the rest of Europe as well. Immediately following the move by the national bank, leading private banks in denmark followed up with lowering over night rates for corporate customers to the same -0.75% level.
Will we see yet another round of asset class bubble blowing. I hope so, as I am currently fully invested. Not so much because I want to be fully invested, but hay – what are the alternatives? And who will save us, if and when it all crashes?
Personally I think we need much more. Not much more monetary policy manipulation, but something more akin to Roosewelt’s New Deal. We need for politicians to help push us out of this artificial monetary created asset driven state of non-recession, and instead take the lead of a new politically backed GREEN new deal.
We need to engage in societal wide spread transformation of our economy from black to green, backed by governments ability to borrow at negative interest rates.
It is the right thing to do. It is the needed thing to do. And it is the only thing for future generation to judge us by.
That is why I do not have any energy related investments in my portfolio besides clean solar photovoltaic investments.
We all need to put our money where it is needed.