Bundesbank warns that interest rates will rise one day

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This topic contains 6 replies, has 4 voices, and was last updated by Profile photo of Chopera Chopera 3 years, 5 months ago.

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  • #57632
    Profile photo of Anonymous
    Anonymous
    Participant

    Jens Weidmann, President of the Bundesbank, has warned that the ultra-low interest rates in the Eurozone today won’t stay low for ever. A lot of Spanish banks are offering sweet financing deals today to dump their property on the market, and of course many buyers today can easily afford Euribor +1pc, or something around 2pc to 3pc. But what happens when Euribor goes up to 5pc and they are paying 6pc to 7pc? Many buyers might find their finances stretched, and I worry that many are not be looking at that possibility down the road. Fingers crossed interest rates stay low for several years to come, if for ever is not possible. In the meantime savers are getting screwed.

  • #117522
    Profile photo of Chopera
    Chopera
    Participant

    Bundesbank should be careful what they wish for. A few percent rise in the euribor and they’ll find themselves bailing out half of Europe!

  • #117478
    Profile photo of Anonymous
    Anonymous
    Participant

    It’s just a question of timing. One way or another they will have to bail out half of Europe because they lent money foolishly and will never get it back. If you have money, don’t lend it to people who have a bad record of paying back, and don’t complain if they don’t pay.

  • #117181
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    A lot of people on the markets are talking about US rates rising. If that happens, expect to see rates rise in the EU and the UK. I actually feel it will hurt the UK more (and the housing market there). In the EU, and in particular Spain, Ireland etc we’ve already seen the lack of credit strangle the market and house prices plummet. The UK to an extent in the south has avoided this through QE. But when interest rates rise then those buying at the top of the market will be wiped out. The alternative to this scenario is that the pound is allowed to plummet to half its value and then the foreign buyers lose out.
    I’m afraid we’ve seen nothing yet.

  • #84756
    Profile photo of Anonymous
    Anonymous
    Participant

    Pearls of commercial wisdom. Its like saying we all will die one day.

  • #84623
    Profile photo of Anonymous
    Anonymous
    Participant

    Pearls of commercial wisdom. Its like saying we all will die one day.

  • #85278
    Profile photo of Anonymous
    Anonymous
    Participant

    @shakeel wrote:

    Pearls of commercial wisdom. Its like saying we all will die one day.

    Yes, and people tend to forget that fact, so a gentle reminder can be useful 😉

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