Well, what about real interest rates and nominal rates?
Most people just tend to look at nominal rates. We have a low nominal rate, but quite high real rates. A: Yes. And you can lock up those real rates, three percentage points on the inflation-linked bond. People don’t seem to have much of an appetite for those bonds because inflation is low. But if you had low real and low nominal, then you’ve got a problem. I think the question as you phrased it — you have to save more in an environment like that. And the answer is yes. Since in that case you’ve got a world which is not benefitting investors as much as it’s benefitting borrowers, debtors rather that creditors. So the market is not giving you, the investor, a good shake. So yeah, you have to save more. Now the other thing is, in a situation like we have now, we have high real rates. You still have a problem. Because while you have high — and high real rates are generally good for investors — you want to be sure that the nature of your investments give you protection against inflation.
