9 Trillion US$ Carry Trade That May Take The World Economy Down
What is it exactly?
Written by Silver Sufferer 15th March 2015
Broadly speaking, the term “carry-trade” simply means borrowing at a low interest rate and investing in an asset that provides a higher rate of return.
This in turn has evolved into a global tide of money that borrows money in a very low yielding currency (that is supported by the country in question that supports a lower or soft currency to boost their own economy) and then converts that borrowed currency into a higher yielding currency to invest it for much higher returns, for example bonds, corporate debt, property, businesses etc.