Negative Interest Rates the New Normal Next Time Economies Slump

[Banjo]

The report from once-uncharted monetary territory: there’s little to be scared of.

http://www.bloomberg.com/news/artic...ates-the-new-normal-next-time-economies-slump

 

[Chubbly]

It is not a bad idea if you want to force banks to lend money which stimulates the economy, otherwise they just borrow cheap money and stash it

 

[clacy]

Ya I don't see why so many are scared of it as long as it's used responsibly

 

[rt5909]

Ya I don't see why so many are scared of it as long as it's used responsibly

Therein lies the rub....do you honestly trust ANY of these governments to use it responsibly?

 

[der_kommissar]

Therein lies the rub....do you honestly trust ANY of these governments to use it responsibly?

Post-2008, I can't comprehend how anyone can make the argument about "responsibility" with a straight face...NIRP sounds to me like stealth confiscation...and 8 years of ZIRP is about the same.

 

[Chubbly]

Therein lies the rub....do you honestly trust ANY of these governments to use it responsibly?

Do you trust ANY of the banks that get to borrow money at 0% interest rates to do the right thing?

The reason they get such low rates is because they are supposed to lend it out to grease the wheels of the economy. Instead they stash it, which is not what they are supposed to do.
So that is why they have negative interest rates

 

[rt5909]

Do you trust ANY of the banks that get to borrow money at 0% interest rates to do the right thing?

The reason they get such low rates is because they are supposed to lend it out to grease the wheels of the economy. Instead they stash it, which is not what they are supposed to do.
So that is why they have negative interest rates

Depends on who you deal with. We have some great local banks here, but I'm in a rural area...beyond my area...absolutely not.