In “Best Investments for Dummies” (First) you write: “If you don’t take care of your money, you lose money. Can you describe this mechanism?
François Mitterrand criticized people who “Get rich while sleeping”. He was right. In the 1980s, when we had money, we could invest it, let it sleep and, by the simple play of interest rates, we earned 10% or 15% without taking any risk. Back then, time literally brought in money. Today there is a total revolution. The environment has become aberrant as we have moved to negative rates. This means that commercial banks pay the European Central Bank (ECB) when they deposit their surpluses there, via this negative rate. In my generation, when we lent money, we made money. Today, it is the opposite and it completely redefines the contours of investment.
The crazy story of negative interest rates (and the puzzle for Lagarde)
At the same time, the French accumulated during the Covid-19 crisis 157 billion euros in additional savings. This over-saving is mainly placed on two instruments: the current bank account, which brings in nothing, and the livret A which hardly brings in anything any more. On the other hand, inflation has risen at an annual rate of around 2%. This means that if you do nothing with this money, that you simply put it in your account, you can
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