an individual buys Yen and borrows from a Japanese bank at 0% interest. The individual then exchanges Yen for dollars and puts the money in a European bank at 5% interest therefore gaining 5% interest on their savings due to the difference of interest % between the Japanese bank at 0% & the European ban…
an individual buys Yen and borrows from a Japanese bank at 0% interest. The individual then exchanges Yen for dollars and puts the money in a European bank at 5% interest therefore gaining 5% interest on their savings due to the difference of interest % between the Japanese bank at 0% & the European bank at 5%. With leverage individuals can make some potentially big profits.
Now they will potentially raise rates causing a squeeze type play. Intervention soon!
Eliant this is still valid correct?
an individual buys Yen and borrows from a Japanese bank at 0% interest. The individual then exchanges Yen for dollars and puts the money in a European bank at 5% interest therefore gaining 5% interest on their savings due to the difference of interest % between the Japanese bank at 0% & the European bank at 5%. With leverage individuals can make some potentially big profits.
Now they will potentially raise rates causing a squeeze type play. Intervention soon!