Interest rates (overnight swaps) you wouldn´t believe
Minus interest, penalty interest, negative interest. These are the buzz words since the ECB, under its former president Draghi, demands penalty interest on deposits of surplus money from commercial banks. These in turn try to pass on the costs to their customers. The first banks have increased their fees and started to charge their customers’ balances with negative interest rates. The money account has finished and the inflation rate is no longer the only enemy.
Money is nothing bad. Money can drive innovation, heal societies and save lives – if used properly. It is not a collector’s item because it deprives it from economic cycle and it loses its positive qualities.
On 30.10.2019 was World Savings Day and the time is ripe to take Moneymanagement into your own hands. For this, knowledge is necessary which is not taught in schools – but we should all deal with this – or – you carry your money to the bank and go to the pub with a beer.
Trading CFD´s, Interest Rate Swaps are the result of different key interest rates of the central banks of the federal states. If you buy one currency (for example USD) then you always sell another one (for example EUR). The resulting overnight rate (interest rate swap) may be positive or negative, depending on the currency pair.
Philosophy: Gains are profits, losses are losses and open positions a passbook.