Posted on 02/11/2016 9:40:48 AM PST by xzins
As recession fears mount in the U.S., Fed Chair Janet Yellen conceded there's a "chance" of a downturn ahead.
Asked by Republican Sen. Bob Corker whether the monetary policy-making Federal Open Market Committee would consider going to negative interest rates, which would entail charging banks to store reserves at the Fed, Yellen left the door open. She repeated a statement she said Wednesday that the Fed had considered negative rates in 2010 but decided that wouldn't be the best course at that time.
"We wouldn't take those off the table, but we have work to do to judge whether they would be workable here," she said.
Banks currently have $2.27 trillion in reserves at the Fed, compared to the required $117.3 billion required. The Fed pays a 0.5 rate on those deposits.
Toomey also questioned whether a negative IOER rate would end up seeing savers pay a fee to keep money at banks. Yellen said she does not believe that is the case of the European countries where it has been tried.
Yep. That is why they want to get rid of cash.
Yep. That is why they want to get rid of cash.
BTTT
WOW, someone got it way fricking wrong.
Exactly. They want a cashless society. Part of the Agenda21 where people are moved into "communities" and there is no rural areas.
All is supplied by government so no need for funds, cash or private metals.
Thought, hell.......accomplished
The reason she’s not taking it off the table is because we will be there by the end of the year. Buy fractional gold and junk silver.
or farmland with water
There is that too. :-)
what do you mean by fractional
Like 1/10th of an oz, .25 of an oz. If things go south gold is going to be way too expensive to go to the grocery store with an oz of gold. You will want junk Silver, dimes, quarter, halves and dollars pre-1964.
Curious I dug up the current amended version of The Federal Reserve Act of 1913.
I have been reading and, as you might expect it is dense, but so far I have found it to be riddled with phrase "not less than zero". It was amended at some point to clarify that the rate "may be zero" but they may be precluded by law from going negative.
An interesting footnote is that in 1922 Congress had to rewrite the Act to prevent Benjamin Strong, President of the NY Fed, from being indicted when he unofficially and unilaterally scrapped the gold standard and aggressively engaged in what the Fed now calls "open market operations" as a method for stabilizing prices and domestic economic stability. Congress obliged the Fed at the time but one can only wonder if they would be so accommodating for Ms. Yellen.
Short takeaway: expect a MAJOR lawsuit the moment the Fed tries to go negative, as well as a preliminary injunction to refrain from NIRP until a hearing can be held. No matter the initial outcome expect it to rocket up to the Supremes.
The Supremes are political. They will do what their parties tell them to do. That means to me that they’ll approve anything the Fed says is ‘necessary’.
Negative interest rates seem to me to be a way to confiscate digits that are being held in their vaults. After all, you don’t park a car in a lot without expecting to pay, they will say.
To prevent a reversion to cash in safes, they’ll have to find an argument against cash. It will be “easily stolen”, I suppose.
Would they argue before Scotus that they are providing a parking location, and that a fee is not unrealistic at all?
I did a little reading about topics closely related to negative interest rates and the paradigm toward abolition of cash. Here’s what I found out. The policy changes are for the purpose of the following.
* Driving savers away from saving and into debt.
* Monitoring all remaining kinds of funds and other properties of present and future debtors.
But the big surprise for many will come with realization of law and policy changes for creditors and lawyers.
It’s called THEFT.
Like your servitude cannot be discharged until you have paid off your debt to the company store.
They will call it a fee. Watch.
Yellen is nothing more than a dithering old fool from academia (Cal Berkley no less) She NEVER ran as much as a lemonade stand. Just another feel good hire, no doubt pushed by Odunga, as the first Women Fed. Chairmen. Or maybe Odunga just hates old white Jewish women, as she was doomed to failure.
“Negative interest rates will cause a mass withdrawal of any monies left in the bank”
Along with the hope that the money will be spent to stimulate the economy. Who wants to stash it under the mattress with all the marauding gangs of Amish whom will add home invasion to their resumes after exodus of cash from the banks.
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