Germany Says “Danke” to Free Money
One lucky country enjoying free money is Germany.
With the European Central Bank committed to buying up to €1 trillion ($1.1 trillion) in European bonds before September 2016, the German government now pays lenders interest of less than half of one percentage point a year for 30-year loans.
And Berlin pays lenders just 0.08% a year to compensate them for parting with their cash for 10 years.
Inflation is forecast to come in at an annual rate of just 0.1% this year in the euro zone.
But it’s expected to pick up 1.2% in 2016 – making it a near certainty that investors are locking in guaranteed losses on their loans after you account for inflation.
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