why negative interests

vox:

negative interest rates are a simple case of supply and demand.

If there isn’t much demand for buying the bonds, the interest rate has to go up to make customers more willing to buy. If there’s a lot of demand, the interest rate will fall.

European investors are reluctant to invest in risky, but potentially high-yielding ventures.

European governments are very reluctant to increase the supply of debt available.

while Denmark’s economy looks pretty similar to the economies of Eurozone members like Finland, Germany, or the Netherlands, it’s much stronger than Greece or Portugal or Slovenia.Because of that strength, foreign investors have the notion that in the long-term, the value of the krone is likely to go up relative to the value of the euro. If you think of buying Danish bonds as a currency play, then buying them at negative interest rates can make sense.

why buy? safety. putting money in bank or government is safer than other-where. to a degree it’s even worthwhile to pay for the safety.

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