The once unthinkable might become policy: negative nominal interest rates. Investors should care as they may be increasingly punished for not taking risks. Yet masochistic investors believe they may be the prudent ones given the risks lurking in the markets. What are investors to do, and what are the implications for the U.S. dollar and currencies?
When investors deposit money in a bank, they are giving the bank a loan. Some investors aren’t so sure whether zero or close to zero percent interest compensates them for the risk of lending money to the bank, although FDIC insurance where applicable may alleviate that … [visit site to read more]