Negative Interest Rates

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Taco
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Negative Interest Rates

Post by Taco »

It doesn’t take a rocket scientist to figure out that it’s criminally stupid to pay someone to borrow money. Yet that’s exactly what’s happening now. Instead of people, though, it’s governments who are effectively being paid to borrow. Negative interest rates are a sign of desperation.

Meet the latest country with negative interest rates
http://www.sovereignman.com/finance/mee ... tes-16792/

When Interest Rates Go Negative
http://www.bloombergview.com/quicktake/ ... rest-rates

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"One of the saddest lessons of history is this: we're no longer interested in finding out the truth." - Carl Sagan
Taco
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Re: Negative Interest Rates

Post by Taco »

Cash is going out of style.

Banning Cash: The Only Solution To Negative Interest Rates
http://www.shtfplan.com/headline-news/e ... s_04172015

The Bankster War On Cash
http://www.economicpolicyjournal.com/20 ... chase.html
"One of the saddest lessons of history is this: we're no longer interested in finding out the truth." - Carl Sagan
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Teal Lantern
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Re: Negative Interest Rates

Post by Teal Lantern »

Taco wrote:Cash is going out of style.

Banning Cash: The Only Solution To Negative Interest Rates
http://www.shtfplan.com/headline-news/e ... s_04172015

The Bankster War On Cash
http://www.economicpolicyjournal.com/20 ... chase.html
Coming soon to a teleprompter near you ..."If you like your cash, you can keep it."
Right before "Only criminals mind having every transaction tracked, except for Hillary's emails and uranium deals with Russia.
не поглеждай назад. 8)

"Even an American judge is unlikely to award child support for imputed children." - FredOnEverything
Taco
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Re: Negative Interest Rates

Post by Taco »

Japan's central bank started offering negative interest rates two days ago in an act of desperation.

Between Japan and Europe, over 20% of the world’s GDP is being managed by a Central Bank with NIRP. More importantly, TWO major currencies in the world are now at NIRP while the US Dollar is at 0.5%. Why does this matter? Because hundreds of billions of Dollars in capital will be fleeing Japan to come to the US.

Negative Interest Rates Show Desperation of Central Banks
http://www.washingtonsblog.com/2016/01/ ... ation.html

Japan Just Lit the Fuse on a $9 Trillion Debt Bomb
http://www.zerohedge.com/news/2016-01-3 ... -debt-bomb

Isn't it interesting, the EU countries with negative interest rates are the same countries being flooded with refugees.

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After the European Central Bank(ECB) went to negative interest rates the US dollar broke out of a 40 year falling wedge chart pattern. The single largest falling wedge pattern in history.

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Last edited by Taco on January 30th, 2016, 6:05 pm, edited 4 times in total.
"One of the saddest lessons of history is this: we're no longer interested in finding out the truth." - Carl Sagan
Moretorque
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Re: Negative Interest Rates

Post by Moretorque »

This is what happens with usury,

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Last edited by Moretorque on January 30th, 2016, 4:18 pm, edited 1 time in total.
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Moretorque
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Re: Negative Interest Rates

Post by Moretorque »

This is what happens with usury, everybody wants their money to work for them which only makes sense but then you have to have a debt jubilee to reset the system because it becomes saturated with to much debt.

They want to do WW3, depopulate the planet in the process and redraw all the lines on the other side. When they get done with the communal collective expect an average IQ of say around 45 for the communal civilization.

Anybody who figures out " hey your just running a counterfeiting operation " will be labeled a terrorist.

Anybody who disagrees with the communal dictates of the communal dictators will be in grave danger. Welcome to communism.

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Taco
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Re: Negative Interest Rates

Post by Taco »

According to Deutsche Bank, the most severe consequences of Japan opening the NIRP(negative interest rate policy) Pandora's box:

1.as the monetary base target of expanding by JPY80trn a year continues, the tax on financial institutions expands rapidly also, even if an upper bound on excess reserves that are subject to the negative rate is set. The net interest margin of Japanese commercial banks is lower than in other countries.

2.it is unlikely to deliver a combination of the reduction in excess reserves and a rise in lending on private financial institutions’ balance sheets: financial institutions cannot avoid this tax. If they intend to shift reserves to loans and holding securities in order to avoid the tax from the negative interest rate, excess reserves (a part of the monetary base) should fall, which the BoJ would not accept. As long as the target for monetary base expansion is maintained, the mostly likely outcome would be increases in both excess reserves and bank loans (or the holding of securities). On the other hand, in order for the monetary base to continue to expand, there have to exist sellers of government securities to the BoJ. A downward shift of the yield curve could cause financial institutions to refrain from selling government securities with higher associated capital gains to the BoJ.

3.the negative interest rate is, in effect, a tax on financial assets, and not the BoJ’s intention. This could lead to an opposite outcome to that of the initial intention, whereby the country encourages companies and households to engage in capital outflow.

Conclusion

If the negative interest rate continues for longer or goes deeper, commercial banks may have to set negative interest rates on deposits, which would expand not only the tax on commercial banks, but also on depositors (households and companies). This could lead to a ‘silent bank run’ via a shift of deposits to cash (banknotes), which in turn damages the sound banking system by enlarging the leakage of funds from the credit creation mechanism in the banking system.
"One of the saddest lessons of history is this: we're no longer interested in finding out the truth." - Carl Sagan
Moretorque
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Re: Negative Interest Rates

Post by Moretorque »

I read where Switzerland was considering just cutting checks every month outside the banking system for every household to keep there system moving.
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Taco
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Re: Negative Interest Rates

Post by Taco »

This just in...

Japan Goes Negative
http://dollarcollapse.com/currency-war- ... e-in-2016/

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"One of the saddest lessons of history is this: we're no longer interested in finding out the truth." - Carl Sagan
Taco
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Re: Negative Interest Rates

Post by Taco »

Negative interest rate policy is inherently self-defeating. While debt continues to grow, the economy’s ability to create the wealth that will be required to repay it is concurrently undermined.

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"One of the saddest lessons of history is this: we're no longer interested in finding out the truth." - Carl Sagan
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