The economic situation in Sweden right now is extraordinary, and a new note to investors from HSBC says that Swedish housing may be in a bubble that “is not sustainable.” Here’s the macro picture:
- 3.9% GDP growth, year on year.
- House prices up 18%.
- Interest rates are set at -0.35%.
- And the government isn’t doing anything about it.
Low interest rates fuel bubbles by making money cheap to borrow. All that extra money drives up prices. Normally, a central bank would respond to rocketing house prices and 4% growth by raising rates, in order to calm the market down. But the Swedish Riksbank has read more >>>
Source : BusinessInsider.Com