Denmark Absurdity: The Land of Value Illusions, Thank You Negative Interest Rates

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:
  1. You hoard cash
  2. You go yield hunting
  3. You start consuming more
Ironically, the average family in Denmark now have a net asset worth of $1.9 million Kroner ($314,000 USD), according to the latest report on household wealth. Danes are buying and selling homes at such a prolific pace, it’s reminding some of the 2006 real estate mania where Denmark experienced one of its worst property market crashes in a generation. Of course, this time, the negative interest rates that are driving this present boom of asset inflation are making everyone feel rich while their currency is getting debased. Last June, the International Monetary Fund warned of the risks of Denmark’s housing market in a report:
“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?