The world is awash with liquidity. Economies are growing slowly or not at all. Companies are cautious to invest in an ever more uncertain future, banks have to be ever more careful to lend money.
Central banks around the globe (except Russia today) have lowered interest rates to almost zero, hoping to encourage lending that will revive the economies.
So there is more and more cash around, waiting for more confidence to invest. In the mean time, the only place to invest seems to be the stockmarket. They were booming all year round, bit of a jitter these days, but booming. For lack of alternatives, not because the economy expands.
Supply and demand: Lots of cash, little demand for it, so also my bank had to lower the rent for the money they gave me years ago to buy my apartment.
2.1%. A few years ago it was 3.8%. Whow!
Of course a savings account gives even less. So I don t have one, well I do, but almost empty. I buy Royal Dutch Shell instead and they give me five percent.
Since oil is seriously down, I suffered from that, but hey, soon it will be OK again and now they are cheap :).
For Europe, cheap oil is great in the short term.
Do you save at 1.5% ?