Not exact matches
The
Fear Trade,
of course, is driven by low to negative
real interest rates — when
inflation erodes away at government bond yields — deficit spending, a weaker U.S. dollar and geopolitical uncertainty.
France's Socialist government announced the first
real - terms increase in the minimum wage for six years on Tuesday, but limited the rise to 0.6 percentage points above
inflation as it sought to balance election promises with
fears of damaging employment.
The European Central Bank's ultra-low key interest rate, while appropriate for the ailing PIIGS nations, is too low for faster - growing Germany resulting in negative
real interest rates and
fears of inflation.
Even during the 1970s, the period when the gold price famously rocketed upward in parallel with increasing
fear of «
inflation», the gold rally was mostly about declining
real interest rates and declining confidence in both monetary and fiscal governance.