There's probably some clever financial trick involved here. But if so, I sure don't see it.
Bank run stimulator?
I'm never going to be able to retire, I have figured that out...
1. Lots of people out of work
2. An uptick in property crime
3. Banks start charging you interest to keep your money in savings.
4. People start taking their money out of banks and putting it in their mattresses
5. Unemployed crooks have a field day
The Federal Reserve is the foundation of the progressive-left nanny state. Is that not obvious by now??
Without a fiat currency, massive debt and manipulated interest rates courtesy of our monetary central planning agency, the US Government would be a small fraction of its present size.
They should just keep doing QE and then give every person in the U.S. a thousand dollars a month. The banks would have fake money and so would we. I wanna buy Boardwalk and Park Place.
As mentioned in related threads, the delegates to the Constitutional Convention had discussed the idea of delegating to the feds, expressly via the Constitution, the specific power to regulate INTRAstate banking, but had dropped the idea. This is evidenced by the following excerpt from Jeffersons writings.
”A proposition was made to them to authorize Congress to open canals, and an amendatory one to empower them to incorporate. But the whole was rejected, and one of the reasons for rejection urged in debate was, that then they would have a power to erect a bank, which would render the great cities, where there were prejudices and jealousies on the subject, adverse to the reception of the Constitution [emphasis added].” - Jeffersons Opinion on the Constitutionality of a National Bank : 1791.
So intrastate banking regulations are another example of unconstitutional federal government overreach imo.
I believe the BOJ has withdrawn the JGBs from the latest auction. Although this news came out (I think) prior to the previous Nikkei session, the Nikkei is down close to 600 currently.
ANYTHING they try to do, or announce, including negative interests rates is a stall for time in an attempt to just find a way to keep the show going.
They just keep kicking the can down the road in hopes of have the inevitable collapse happen on someone else's watch.
With confiscatory tax rates and so forth, tax-free government bonds paying negative rates might be seen as a way to ‘lighten’ the tax burden? I dunno, just spit-balling here. But negative rates seem to be a global feature right now. If countries aren’t already doing it, they are moving in that direction.
on the federal debt, a negative rate is a tax
What would be the tax consequences of such a bond?