Posted on 04/24/2021 8:18:07 PM PDT by SeekAndFind
So what does it mean?
It means the central banks have f*&^ed up the world economy so badly that there is no longer a time value of money.
That means there will be ongoing grotesque misallocation of capital—which will inevitably lead to a collapse of the world economy.
It is a matter of when, not if....
An analogy would be if you started to pour antifreeze into your gas tank—the car might keep coasting downhill for a while, but eventually it would seize up and die.
RE: So, what does it mean?
A negative deposit rate is intended to encourage lenders to do something more useful with their money than park it with the ECB. It’s also designed to help weaken the euro to provide some assistance to eurozone exporters, and, hopefully, spur prices at home by making imports more expensive.
Higher state spending, meanwhile, is aimed at boosting economic activity, which after a decade of only moderate growth is currently stalling or even receding.
Investors, economists and policymakers are increasingly pointing to long-term structural explanations for the shift to negative rates. They cite demographics, saying that aging developed world populations may be suppressing demand. It is also speculated that technological innovation may be dragging prices down.
I think that deflation is the hallmark of depression.
So what? Put the same cash into a bank-owned brokerage accout, and they won’t charge you a dime if you make a single stock transation for any amount.
It comes here next. You’ll have to pay the bank to store your money.
This is an interesting point. Inflation should be sufficient to force money away from savings, so implementation of negative interest rates must be an indicator of deflation. However, we're certainly not seeing deflation at the gas pumps or grocery checkout lines.
Strange times. I don't think this ends well.
If there was a demand for capital by entrepeneurs and businesses looking to expand, then the banks would accept deposits and then lend them out at a higher rate of interest. What is happening is the green new deal in action. Thr ecomomy is stalling and even contracting.
More like stagflation.
Germany has highest cost of electricity in Europe.
Europe is in deflation, that’s what it means. They’ve had negative interest rates for quite while, it shouldn’t be a surprise.
Look at the balance sheet for Capital One. They’ll pay you between .2 and .4% on your CDs, and then lend it to suckers with credit cards paying on average 18%.
“You’ll have to pay the bank to store your money.”
For a long time banks have lost money on most depositors. If you have under 10K in your account it cost more to provide you services than they get from loaning it out.
Banks took this loss in the past as deposit customers turned to them for mortgages, credit cards, and other and things that do make money. It is now much easier to rate shop so those relationships mean less.
What about Fred’s Bank.
“Hi, I’m Fred, I have a bank. You got $1500? ...ahhh, I’ll put here ... in my white suit...White suit, front pocket!”
-Steve Martin
It means this:
“they can put that money to work somewhere else… like the stock market. That’s exactly what these low-interest-rate policies are designed to do… get folks investing.”
that is, you can expect a massive bubble of inflated prices in various “investments” ... a bubble that will eventually crash, cause a gigantic loss of peoples’ money, and cause a subsequent depression ... this is how EXCESS liquidity is ALWAYS liquidated: the little guy takes it on the chin ...
safer to stick the cash under the mattress or ride “investments” up for a SHORT while and get the hell out before everyone else does and THEN put your money under the mattress ...
AND we can expect this bubble-crash cycle here in the U.S. due to the GIGANTIC amount of money that Biden is in the process of dumping into the U.S. economy, money that will have nowhere else to go except into “investments” after everyone buys a new car, a new laptop, a new large screen TV and a new dishwasher ...
btrl
Can’t they just put 25 thousand euro in four banks? I don’t understand the big deal. Nobody should put all their money in one bank anyway. I have 3 banks myself and we don’t even have this system.
No posts about Revelations yet?
I think it means the major stock indices will continue to rise for a while.
A safe deposit box is cheaper
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