Draghi: "Savers have alternatives"

According to ECB President Draghi, savers should look beyond their savings account. He said this earlier this week in a interview with the German newspaper Bild. In doing so, the central banker is responding to the increasing criticism of the central bank's monetary policy. Due to the extremely low interest rates, a savings account no longer yields virtually any returns.

According to Draghi, it is necessary to keep interest rates low, because the alternative of an interest rate hike has more negative consequences. According to the central banker, we should think of deflation, rising unemployment and a new recession.

Low interest rates

The interest on savings must come from economic growth, so according to Draghi, it is also in the interest of savers to keep interest rates low for a while. According to Draghi, savers should not be blinded by the low interest rates they receive on their savings accounts, but should also look at inflation.

"What counts is the return in real terms, i.e. after adjusting for inflation. And that return is higher now than it was in 1990. Back then, you may have received more interest on your savings, but inflation was also much higher then. So your return was actually much lower then than it is now."

Draghi also notes that there are also many people who benefit from the low interest rates, such as homeowners with mortgages, companies that can borrow more cheaply and employees of companies that benefit from the low interest rates.

Alternatives to savings

Draghi notes that savers can also take the initiative themselves to improve the return on their assets. He says the following about this in the interview with the German newspaper.

"You don't have to leave all your money in a savings account, you can also invest it. The Bundesbank recently calculated that the average return on all the wealth of German households is almost 2% per year."

Draghi does not say what alternatives savers have to a savings account. With the prospect of negative interest rates and a protracted debt crisis, it might be a wise idea to buy physical gold. Central banks around the world are moving towards negative interest rates and debt purchases. That's reason enough to worry as a saver. Especially in Germany, where the consequences of hyperinflation have been experienced up close.

Protect your assets with physical gold and silver today!