Never before has there been as much money as there is today and rarely has money being so cheap and yet the central banks continued to pump money into the world we are being flooded by trillions of dollars and euros. D. Konica on forever it's a ticking time bomb but. It's never been easier for investors.
To get their hands on cheap money running up debts is practically free of charge organizations are just pouring large amounts of money from each other. And then using that to make money by lending it to others who are using that to lend it to others. A snowball system that connects the rich become even richer savers on the other hand are losing billions every year thanks to low interest rates. If you just open a savings account it's almost like burning money
This deluge of money has created deals worth billions companies are portions sold for vast sums because when's it cheap the employees become the poems of the speculators.
The question is where's all this money going. We are endowed Boden dolphin western Germany this couple faces the same dilemma as many others what to do with that savings in this world of low interest rates call Hines H. a recently retired court bailiff knows all about money and debts his life insurance policy is due to pay out soon how should he invest the money in the house they've already got one.
There's a lot at stake for the cycling enthusiast he and his wife wants security in old age as well as a good time. I was hoping that soft to the pay out I'd be able to invest the money again and earn interest which could be added to a pension and to those who. On the phone but that plan isn't going to work out the sudden Slocum whose him next. Karl Heinz has always led a modest life he always stayed away from investments that paid high returns but were risky he never thought it would come to this he doesn't know what to do with the interest rates this low and unknown to his friends.
Some of told me they won't keep the money in a bank account anymore it seems both of our companies instead they'll deposited as physical cash in a safe position spoke with the whole team to put to put me on. It's barely worth going to the bank interest on savings is almost 0 that just point one percent that means that he gets one cent for every 0 years. Yes.
What's happening with his money. People are worried says the director at the local branch of folks bank L. management. Although there hasn't been a run on the safe deposit boxes yet there have been more requests to keep money in cash will go. We are leaving the did since her father was we've seen a continuing fall in interest rates over the past 8 games aren't need a crystal ball to tell you whether it'll stay like this for a long while but I think we'll have the situation for another 2 or 3 years after that things will change again.
But we won't have the interest rates we have 10 or 20 years ago it above your bed and this method since since the end of the year put Cincinnati genre magazine hub. The manager knows who he blames for these low interest rates the European central bank. The remix of the ECB is clear price stability it uses the base rate as its tool to deliver that and it's been lowering the base rate steadily ever since the financial crisis down to 0 save us a left by the wayside but countries with high levels of debt such as Greece are able to get their hands on cheap money sent to Penn ailing banks in southern Europe. The cheap money is supposed to fuel growth by buying government bonds the ECB has pumped additional trillions of euros into the markets otherwise the system would face potential collapse the possible this is a deluge of money the money has to go somewhere into channels and real estate which continue to rise in price the result is a massive concentration of wealth right at the top.
Bill Gates the world's richest man has a 14 of €65000000000 that's the market value of his chance. To compare the total value of one of the world's cash is less than 100 times that amount 5000000000000 year is. The value of all goods and services created every year around the world it's €75000000000000 that's the real economy the wells dense up higher than that state businesses and private individuals will have dance well living on credit. 705000000000000 debts the value relatives the speculative financial bets on the future they've got almost nothing to do with the real go to anymore to recap this is the fortune of Bill Gates. What happens when there's too much money in the world economist Max ater says this deluge of cheap money isn't just flooding the big banks he sees low interest rates as the symptom of a massive sickness in the global financial system.
The biggest danger is that this flood of cheap money will split how society it moves money from the bottom up puts he sends a gigantic redistribution machine. Interests and low interest rates are demanded by many economists they mean that states can borrow on the cheap states can take on more debt it also means the rich can do the same and often without any liability if they default because if I. as one of the super rich going to business done on only liability to the extent of my holding not with the rest of my wealth that's a blatant injustice compared to middle class families and regular people with home construction also diminishes this flood of money doesn't just save states and banks it also favors the rich who used this cheap money to by chance companies and real estate with rapidly rising values while the financial investments of ordinary people lose value the middle seat the middle classes have savings and insurance policies and these investments are the losers in a low interest rate world common forest citizens suffer because real estate prices are going up and that full rents to rise a stagnant underwent ultimately strike.
London the world's largest financial center illustrates very clearly the effect of this money tree deluge trillions that traded here 300000 employees in the financial sector I'm trying to turn money into even more money London's own real estate prices are skyrocketing all the major banks have offices here this is where the money of the world which is invested. Hello mom participate she knows the scene well there are neighborhoods.
All these use house and again depending on the size it's difficult to say how deep they are but anywhere between 3 to 5 maybe 5 to 7000000 on this on this but in this particular area 5 to 7000000 pounds now you think about mews houses this is a family place just think about what kind of family can afford to buy a house for 3 to 5 foot even for 5 to serve 7000000 pounds.
The expensive houses are rules speculative objects and empty London belongs to investors who don't live in the city well known bonus of H. discovered that this town house was sold to a Ukrainian billionaire for 66000000 pounds. On paper the mansion is owned by a shell company. Right now there is in excess of 40000 properties in London that's owned by anonymous offshore corporations meaning that we don't know who the owners it could be decent people he could be mafia therefore we suspect that a lot of this money that came through on that he exploded prices here is actually over 30 large. This construction underway everywhere speculating with real estate is the big game in town trillions of euros from Russians Germans Chinese and Indians have poured into London. From social economical perspective is not sustainable you cannot have a city where residents and workers cannot cannot live in this this is a this is with the problem with bubbles is that nobody knows when they're gonna burst. But London doesn't have a monopoly on real estate bubbles they now exist in cities around the world.
If the real estate bubble were to burst sure it would hit the wealthy you are invested that Stevenson but they have a diverse investment portfolios they seize opportunities around the world if the real estate bubble in Munich what to burst they'll be in Rio of Tokyo they connect globally but the middle class content is kinda middle she's missed. As seen in the financial crisis of 2008 the middle class is hit while the rich get richer in times of boom and bust not much has changed the minor regulations introduced into the financial sector aren't very tangible here in London the speculators are looking for new ways to make more money in the world's number one financial center.
Many transactions are now taking place in the shadows banking system the business's the lucrative deals are as plentiful as ever and brexit we'll see the regulations relaxed even further the show must go on. Alf Townsend has lived through tool he's been driving a taxi for 54 years shivering bankers and brokers around the city dealing in the world's trillions has become the trump card that the British economy he says optimistically.
Beneficial to learn about the case that those people who invest whatever what what live upon the world I come from if I want to invest that money in the city that's good for a big but if you call and I'll get a cut of it yet. He too has profited but in exchange Alfa has to live far outside the city centre 1000000 pounds for a single room apartment no ordinary local can afford that.
There's not many Londoners apart from my cell papal we're still live in London most of a boat of selling the house is on the side of their both houses of the council by the fat profit sold it and moved out to a suburban. Hi there why yeah. Some leave this city entirely and forever. Gerland Anderson was one of London's financial straws he now lives in Wales he paid the same for his farm as he would have to pay for a tiny single room apartment in downtown London but that's not the only reason why he came here he's had enough of the financial excesses.
The city is full of greedy ruthless clever people and if they put more regulation a little bit more compliance some restrictions these guys work out how to game the system to make sure that it benefits them. Today he writes novels and screenplays about the financial world he used to earn a few 0 pounds a year he didn't care who the trades hud that's a few years ago now but nothing has changed says Anderson the system rewards those who make fat deals at the expense of others.
I make lots of strange gambles incredible reckless decisions but they come good then I make huge amounts of money. If they go bad maybe I lose my job but that's the only downside to this is what is called an asymmetrical risk encourages. Short term gambling. Anderson is certain that the financial system will keep growing and spoiling the prospects of big profits the low interest rates the deluge of money the former financial insider believes these elements make for an explosive mix therapeutic.
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