Global fears as markets lose faith in central banks

The Times ^ | 7 Mar 16 | Patrick Hosking, Financial Editor and Philip Aldrick, Economics Editor

[SkyPilot]

The global economy is heading for a storm as faith in policymakers dwindles, according to a stark warning from one of the world’s most respected financial institutions.

The uneasy calm in financial markets last year has given way to turbulence, the Bank for International Settlements, known as the central bank for the world’s central banks, said in its latest quarterly report.

Financial markets are losing faith in the healing power of central banks and their latest policy weapon - negative interest rates - to boost the world's main economies, the bank said.

[DoughtyOne]

[stockpirate]

I wonder if people understand just what negative interest rates are and how they function?

[soycd]

Plant potato and hang on ...

https://www.youtube.com/watch?v=dexk69DWzUg

[Lazamataz]

Nobody makes it out of 2016 alive.

[Leaning Right]

The experts trash Trump, and his approval numbers go up.
The experts trash the economy, and the stock markets go up.

Lot’s of weirdness right there.

[austingirl]

IS there such a thing as a respected financial institution any longer?

[cradle of freedom]

Aren’t these supposed to be the top guys, the smartest guys in finance?

[Ken H]

The 30 yr treasury is yielding 2.70%. The 10 yr treasury is at 1.88%. Incredible.

Vicious deflation gripping the world.

[central_va]

I've tried but I can't understand a negative interest rate.

Why is a 30 year mortgage at 3.5%. That is a big spread between the Feds discount 0.5% and the 30 year.

[stockpirate]

Negative interest rate.

Let’s say the i terest rate is -3% and you have $10,000.00 in your savings account. They will deduct the 3% devided by 12 months from your account every month.

Right they subtract money from your account.

The government does this to try and force people to spend money.

[RegulatorCountry]

Or force it into the stock market.

[central_va]

How is it mortgage rates are stuck in mid 3%?

[RegulatorCountry]

Mortage rates are tied to the 10 year T bill, not the Fed rate.

[stockpirate]

Because the government sets the rates

[SkyPilot]

Yup. The NIRP is to either force consumers to spend, or get them to pour their declining wages into the inflated and precarious QE bloated stock market. If this thing blows, the shrapnel wounds will be life changing across the globe.

[unixfox]

Aren’t these supposed to be the top guys, the smartest guys in finance?

That don't have to be smart in finance. Just smart enough to fool everybody that our currency is still viable.

The game is up and they know it.

[austingirl]

The banks are making interest while they take your money via negative interest rates. Win-win for them.

[KyCats]

And to make sure you can’t avoid the negative interest rate by holding cash instead, there is already talk about eliminating cash entirely. The EU is almost certainly going to eliminate the 500euro bill and the $100 won’t be far behind.

[ConservativeMind]

Well said.