Grilled with barbeque sauce
If we get negative interest rates and banks start charging us for deposits will they send us interest statements with negative interest values? So your interest line on the Form 1040 could be negative? How would the IRS deal with that?
In the article, the discussion centers on banks, but I am curious as to whether such a proposal (i.e. negative interest rates) extends to credit unions.
“If savings accounts aren’t accruing much interest, companies and savers are incentivized to” - withdraw most of their money in cash and store if safely on premise.
It’s why Larry Summers wants to outlaw the hundred dollar bill and why all the rest want to outlaw cash all together.
“savers are incentivized to spend the cash or invest elsewhere” - when Marxists and redistributionists no longer run the government and the economy.
The biggest problem I see with negative interest rates is that you’ll have to give a toaster to the bank as an inducement to open a new account instead of vice versa.
The Fed will not go negative. They don’t have to. They have lots of tools that other countries don’t have. They can buy more notes. Or they can sell they can buy the short term bonds and sell the long term bonds.
The US dollar is strong and getting stronger in the long run. Other countries don’t have that situation. Even Europe and the Japan are forced to buy oil denominated in dollars. So our Fed really doesn’t need to go negative ever.
And by the way. The reason these people are going negative is because the government debt is eating up a great deal of the money supply.
Here is another idea. Tax less, so there is more money in the private sector. Regulate smarter so companies don’t spend a lot of money dealing with regulators. Hire fewer government employees who retire early causing a “need” for immigrants. And a government retiree adds to the debt and lowers overall productivity in the economy.
Translation: 'bring on a recession, and we'll let you do it.'
And eventually it will mean you pay the bank for keeping your savings in their bank. Might as well keep it in a checking account...or in a hole in the back yard.
You know, what more people need are Swiss bank accounts. [Highest negative rate of all: -0.75%. ...dirty little secret there.]
The Fed does not have a clue. Obviously low interests are the problem. Raise them to 5% so savers could get a decent return on their savings and people would spent those earnings.
A lot of folks look at their principal balance as their earnings engine and don’t want to touch that.
The paradox is that if they go negative wanting you to withdraw your savings and spend it, good luck getting any significant amount from your account. The banks just won’t have it.
A few hints here on what’s happening:
1. It all goes back to manufacturing. A nation needs agriculture to survive, but agriculture will not make a nation rich or keep it rich. Energy is a supply source for manufacturing. A nation needs revenues of value from manufacturing to spend enough for good services from government (infrastructure, defense, etc.). Manufacturing “based” in nation number 1 but actually being done in another nation will impoverish employees in nation number 1 and only keep investors of that manufacturing wealthy temporarily. Even the “trickle-down” to cheap services eventually stops. The offspring of those investors are unfit to manufacture and therefore unfit to manage manufacturing (aptitudes learned over lifetimes—not in schools).
2. The plans for negative interest rates are only an intended extension of the failing debt regime. Negative interest rates should spur many employed people to appear to be busy, productive and useful. So, regulators, NIMBYs and bosses of the service “industry,” get out there and stop more people from working.
;-D
It’s essentially negative now, what with the real inflation rate far exceeding the rate they pay out.
But seriously, if they want a run on the banks, this would be a good way to trigger it.