Due to the ridiculous and draconian monetary policy of negative interest rates, Danes are feeling a lot richer on paper. Negative interest rates have been active in Denmark for more than half a decade. For unfamiliar readers, a negative interest rate is when a depositor is charged to keep their money at the bank. Naturally, when you are charged to keep money at a bank three things will likely happen:
- You hoard cash
- You go yield hunting
- You start consuming more
“Continued house price rises would further increase households’ exposure to shocks, including from rising interest rates”So, as Denmark continues down this more than half a decade-long of negative interest rate trend, which has spurred major asset inflation, how will Denmark fair in a tainting cycle?