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by bawana
2502 days ago
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Why doesn’t the danish govt just print more money? Although part of the eu, they opt out of the monetary policy and still use the kroner. OTOH, how much of the eu debt does Denmark own— and vice versa. If they affect the kroner-euro exchange rate then they could lose money if it moves the wrong way. |
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This happens because investors a wary of putting too much of their capital in stocks. Nobody knows what Trumps trade wars will lead to, so that's a significant risk factor for stocks.
Consequently, investors look for other places to put their money until the uncertainties gets cleared up. Preferably somewhere safe - meaning not necessarily in a bank as banks can fold. Danish real-estate bonds fits that: The Danish real-estate market is generally considered sound.
Furthermore, Denmark has a declared policy of closely following the Euro. The DKK has to be within a narrow band of 2.25% (IRRC) of the Euro. Having followed this policy ever since the EMS disbanded, investors generally trust this commitment.
Which means that until Trump cleans up the disturbance he has created, investors will flee stocks and look for safe bonds, to the extent that lenders/investors will actually pay for safe investments.
While attractive for lenders, it is a sign that something is very wrong with the economy. In a healthy climate money would flow to the stock market.