Japan Financial Investments
September 9th, 2007
Question: What effect will “Japan style” very low/zero interest rates have on consumers & business in the UK & USA?
If the UK & US experience a long period of very low or zero interest rates, what will be the consequences for savers, borrowers and business?
If savers stop getting decent return on conventional saving products, will they look elsewhere in the financial world for another source of income? For example – shares or zopa style investments?
Or will people just sit on their money and buy a good mattress to store it in?!
One remaining good source of funds for financial institutions is retail savings funds. If savers stop investing in retail funds, will more banks etc go bust?
Any thoughts or all comments appreciated on this subject,
Thanks
DC
Answer: savers have to hold their money in bank if bank do not charge them. they are afraid of shares and style investment already. there is no place can get higher reward for time being;
borrowers and business will have lower cost due to lower loan intereset;
people will just keep money doing nothing for time being.
yes, more bank will go bankcruptcy if no savers investing in them. they have to give savers confidence.
it is better to keep money in bank untill the economy becomes better.
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