Saturday, 11. February 2017

With BAC infrastructure funds invest independently many investors are deeply concerned by the current economic situation. While an economist for the future suggest high rates of inflation, the others expect a deflation. To put the concern of investors: on the wrong horse, and so the fortune to lose. Because there are compelling arguments for both approaches. The economic recovery is weak after the strong recession of 2008/2009, despite low interest rates, there is little growth, not really start the economy. Due to the significant savings pressure of the industrialised countries now threatens relapse into recession: the State can no longer stimulate the economy from savings reasons with fiscal stimulus, interest rates have already arrived to a minimum.

Central banks cannot escape the liquidity increased by massively lowered interest rates markets and have hardly any measures to stimulate the markets and avoiding deflation. The best example is Japan: since the beginning of the the Federal Reserve tried 1990s constantly, to stop deflation, but economic recovery stimulus nor negative interest rates led to successes in the project. The second scenario of fear: Inflation. Central banks increase the rate to the low interest rate environment. Borrowing more expensive and therefore less claim, that drains the market liquidity. As a result, the prices rise, there is a hidden tax increase”, affecting the entire population.

From fear of inflation, many investors have fled already in classical monetary investments such as gold, real estate or shares. That has to last fast prices at an all time high and further purchases lose attractiveness. The dilemma: The classic systems such as fixed-income securities, shares on the current highs or real estate require that investors opt for a scenario inflation or deflation. When a wrong investment decision experience losses. Can investors with an investment as well as two scenarios on the safe Page to be”, says Oliver Schulz, Managing Director of the issuer BAC Berlin Atlantic capital.

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