Free Republic

Swiss franc surge sparks bets on negative interest rates The Swiss franc has soared to a decade high against the dollar as investors rush for shelter from the global trade turmoil, sparking bets that the country’s central bank will have to lower interest rates to zero or below to curb the currency’s rise. The currency, historically a financial market haven because of the Alpine country’s political and economic stability, reached near-record strength against the dollar this week, with the greenback sinking close to CHF0.80 for the first time since the franc’s shock appreciation in 2015. Deflation risk Yields on short-term...

When we get to the point that we select passages from Scripture that we like, while ignoring or downplaying those that we do not like, or to which society is resisting, we not only compromise Scripture but we sully God's plan for His people. Certainly, the time has come when people have not, and will not put up with sound doctrine, because it doesn't jive with societal tendencies (Read: Sin.) From Andy Stanley, to the ongoing lies and coverups coming from our own American Government, the art of lying and deceiving is reaching a frenzied pace. The Believer is daily...

In early 2015, Switzerland's interest rates turned negative. Not for one year. Not for five years. But all the way out to 10 years, meaning that virtually everyone desiring to park their cash in safe-haven Swiss francs had to pay for the privilege. And Swiss bonds weren't unique. Yields on French and German sovereign debt went negative out to five and seven years, respectively, while the overnight Euro Interbank Offered Rate (Euribor), which had averaged about 2% for the previous couple of years, fell below zero and stayed there. By the end of 2015's first quarter, paper accounting for 31%...

The Bank of Japan is stepping up its efforts to kick-start the country's struggling economy by taking interest rates into negative territory. The central bank announced Friday that it will introduce an interest rate of minus 0.1% and will go even lower if needed. In theory, negative rates encourage consumers to save less and spend more. They can also weaken a country's currency, helping exporters. ...

Jim EdwardsOctober 28, 2015 Sweden is shaping up to be the first country to plunge its citizens into a fascinating — and terrifying — economic experiment: negative interest rates in a cashless society. The Swedish central bank held its benchmark interest rate at -0.35% today, the level it has been at since July. Although retail banks have yet to pass on that negative to rate to Swedish consumers, the longer it's held there the more financial pressure there is for banks to pass the costs onto their customers. That's a problem because Sweden is the closest country on the planet...

The concept of earning interest on money in the bank is so deeply ingrained into economic life that few people even know that the opposite can happen too: Banks can take a percentage of cash from your account in the form of negative interest rates, under certain conditions. Normally, this doesn't happen. Banks want your cash, and pay you interest on it, because the more deposits they have, the more they can lend it to others who pay them even more on their investments. But interest rates in Europe are so close to zero — and economic activity is so...

Here’s an astonishing statistic; more than 30pc of all government debt in the eurozone – around €2 trillion of securities in total – is trading on a negative interest rate. With the advent of European Central Bank quantitative easing, what began four months ago when 10-year Swiss yields turned negative for the first time has snowballed into a veritable avalanche of negative rates across European government bond markets. In the hunt for apparently “safe assets”, investors have thrown caution to the wind, and collectively determined to pay governments for the privilege of lending to them. On a country by country...

The central banks don’t like that cash makes it hard to cut rates to below zero. 0% is pretty much as far as they can go (though there are exceptions such as in Denmark.) Bloomberg reports;

Deutsche Skatbank, a division of VR-Bank Altenburger Land, which was founded in 1859, is not the biggest bank in Germany, but it’s the first bank to confirm what German savers have been dreading for a while: the wrath of Draghi. Retail and business customers with over €500,000 on deposit as of November 1 will earn a “negative interest rate” of 0.25%. In less euphemistic terms, they have to pay 0.25% per annum to the bank for the privilege of handing the bank their hard-earned money or their business cash. Inflation has had a similar effect in the zero-interest-rate environment that...

Investors have bought billions of euros in German treasury notes that pay negative interest—meaning the purchasers agreed to pay a small fee for the privilege of lending the German government their money. […] Germany auctioned €3.34 billion ($4.3 billion) Wednesday in two-year notes at an average yield of minus 0.07 percent. Rates are very low all over, and German debt is considered ultra-safe, so security-minded investors are paying for safety. Expectation the European Central Bank will buy bonds has also driven down yields, which move opposite to prices. And the small negative yield on the notes is still a better...

Negative Nominal Interest Rates: Highway to a Cashless, Statist Hell I warned about this in part two of my 2.5 hour Economics Video Presentation back in November of ARSH 2012, and, sure enough, it has now happened. Because, as I have been saying all along, for anyone who knows ANYTHING about ANYTHING having to do with economics, finance and/or banking, and who does not have their brain bucket completely and firmly inserted up their rectal vault, it is obvious what is happening and how the chain of events will unfold. If a mouthy broad with a mere bachelor’s degree in...

In the wake of all the misguided pleas for negative interest rates in Europe (hoping to get banks to lend), comes news US banks warn Fed interest cut could force them to charge depositors. Leading US banks have warned that they could start charging companies and consumers for deposits if the US Federal Reserve cuts the interest it pays on bank reserves. Depositors already have to cope with near-zero interest rates, but paying just to leave money in the bank would be highly unusual and unwelcome for companies and households. The warning by bank executives highlights the dangers of one...