Man I wish I had big cash to put into a negative rate. :(
I think I read it here, a few years ago:
Japan’s economy is a bug in search of a windshield.
Like anyone has any incentive now to put any amount of cash with any bank. Storing it in your mattress makes more sense right now.
When money can no longer make money, eventually the incentive for banks to lend out money shall collapse altogether, and the whole system of investment grinds to a halt. Money lending becomes the province of loan sharks, who lend out at horrendous rates and have a rather firm collection policy. And, oh yeah, are notoriously free of regulation. Sort of a “non-bank” investment enterprise.
There is a black market for money, just like any other commodity.
The rate is for deposits, not loans.
With NIRP, people will also be very tempted to stuff their $$ in a matress.....or a safe.
Basically, this will be a disaster for the Economy. However, it will give Government more running room to spend and redistribute wealth. Which is the main goal.
Like Amazon make up the loss on volume. Japan is our future. They played the game longer with a high national savings rate and strong export market. Their elderly population is needing their savings back and exports are no longer driving the economy. What is their debt to GDP now something like 240%? at least the Japanese people will not be in the streets looting and burning.