Fed actually developing a response to

[whereiwant2b]

www.bloomberg.com/news/articles/2016-02-02/rates-less-than-zero-is-bank-stress-fed-wants-to-test-in-2016

Negative interest rates. Although they are protesting too much that it is not really a "forecast" , they are developing a response. A real shocker to me.

[paisley]

Now, think if keeping money in a bank under the term of negative interest.....ie....a percentage rate fee assessed to the person or entity who owned the money.


Then ...under negative interest rate.....would one be paid to borrow money?

Think of an arm loan..... if the negative interest is applied....would not a debt pegged to the Fed rate result in the lowering of interest payments for such debts...


Is is how liberals borrow to get out of debt?



Yes, I know reality will be charging to have money assets and charging to borrow money.... cause there is no way the earners win.

[whereiwant2b]

www.telegraph.co.uk/finance/economics/11895084/How-Swedens-negative-interest-rates-experiment-has-turned-economics-on-its-head.html

This is an article on how Sweden's negative rates has worked out so far.

[whereiwant2b]

hosted.ap.org/dynamic/stories/E/EU_GERMANY_CASH_LIMIT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2016-02-03-06-58-46

Is this not so much an anti terrorist limitation as the article states but another way to shift society into a cashless economy much more controllable by financial organizations?
Am I drifting into a conspiracy frame of mind? Not in the sense of some deep manipulative group plotting world domination but in the sense of too many different coincidences of usefulness being seen by various politicians, financial group, academics? All seeing a way of getting at a "problem" by removing the independent actions of cash holders?

[Ozarks Tom]

whereiwant2b, You're not seeing a conspiracy, you're seeing desperation. The Central Banks have nothing left in their bag of tricks to stave off worldwide depression. When you see words and phrases like "never seen before", and "innovative", you're seeing explanations for grabbing at straws in a stormy sea.

In spite of a strong dollar making imported goods less expensive, and freight rates both sea and land dropping to new lows, consumers aren't buying. The chain reaction from consumer to corporation to banking has started. Without profits companies lay off workers, refinance or default on loans to restructure. Governments don't collect taxes on losses, the whole system starts coming apart.

When interest rates were at 4-5%, Central banks had room to work their manipulations and forestall the eventual. If they'd have admitted the inevitable, and let capitalism correct their mistakes at the time, the medicine wouldn't be nearly so bitter now.

[whereiwant2b]

I do know that if I was getting any kind of interest on my savings I would have done some things like get new counter tops or have a shed built. But with simply trying to preserve my capital for emergencies, I simply don't spend.
I never think of myself as unique so I suspect this is pretty common. And maybe what makes this academic theory of financial control so coubter productive.

[Ozarks Tom]

The theory of "financial control" is a pipe dream of banker and totalitarian states. Free market capitalism won't work with controls, but the bankers and tyrants still keep trying.

Here's an article that goes into depth on the economic turmoil just waiting in the wings. Surprisingly, it's from the NYT, an every optimistic source usually parroting the happy government propaganda.

Beneath the surface of the global financial system lurks a multitrillion-dollar problem that could sap the strength of large economies for years to come.

The problem is the giant, stagnant pool of loans that companies and people around the world are struggling to pay back. Bad debts have been a drag on economic activity ever since the financial crisis of 2008, but in recent months, the threat posed by an overhang of bad loans appears to be rising. China is the biggest source of worry. Some analysts estimate that China’s troubled credit could exceed $5 trillion, a staggering number.
www.nytimes.com/2016/02/04/business/dealbook/toxic-loans-in-china-weigh-on-global-growth.html?_r=0
that is equivalent to half the size of the country’s annual economic output.

[blackfeather]

Japan has gone to negative interest and it will only be a matter of time till we do. At first it will probably be just below zero, and only large depositors will probably feel it. As time goes on banks will impose handling fees on small accounts. No more free checking. The second problem is there isn't enough physical cash on hand. If everyone starts to take money out and stuff their mattresses, there isn't enough printed paper to handle it. So capital controls will have to be invented. If you take cash out of the bank, then fees are possible, probably higher than the negative interest. You probably won't be able to take cash outside the country with out paying a staggering fee, and you will not be able to buy expensive things with cash. Probably anything over a couple of thousand dollars will need to be purchased electronically. This is what other countries are doing and we will probably follow suit.