The term NEGATIVE INTEREST RATE is precisely why Lehman 2008 Occurred
We then bailed out the people who invented the worldwide disaster to the tune of $13,000 for every American family.
So now things have REALLY gotten so bad as a result of (in order) the bubble, bailout, higher capital requirements of banks (killing loans), loss of confidence, loss of demand, loss of production, loss of savings and then loss of more loans, all of which required the fed to nearly STOP charging interest since while injecting (printing) $$ into the system … the Feds now want to CHARGE you for you HOLDING your money in a bank.
NEGATIVE INTEREST RATE. CDO, Credit default swaps, Tranche, Collateralized Security .. all terms which obfuscate the reality of the ‘product’ or action.
The Bank of Japan joined the negative interest rate club at the end of January. Japan, along with Denmark, Sweden, Switzerland and the eurozone are effectively penalising commercial banks…. Negative rates, coupled with weak earnings growth in some of the world’s largest lenders, and concerns over new EU “bail-in” laws designed to force investors to take the hit from bankruptcies, all weighed on bank shares.You may have heard this is ‘LIMITED’ to commercial banks, but this will have to be passed on sooner or later, and we all should remember CYPRUS, where desperate commercial and other banks levied private accounts because the govt could NOT bail them out, and the EU WOULD NOT..
I have been seeing articles for a week indicating this is REALLY under serious consideration, because these people are PETRIFIED it’s all going to go to pieces (right in front of a presidential election…AGAIN), and they will have BOTH an economic crisis (WORLDWIDE) and a political crisis. So their brians are screaming at them “DO SOMETHING”.
Ergo, this brilliant idea, which Americans who retain ANY confidence in banks will interpret as a ‘get all your cash the day it arrives by pay or from your 401ks safe deposit box stimulus program‘ or we will see the home safe and gun industries EXPLODE into the sunshine of ever more rapid growth.
The govt will get its wish of cash not laying around in banks doing nothing, and instead we will hoard every cent we can, away from the govt eye because we will be certain the next step or the one after that will be … COMPULSION.
Negative interest is already confiscation.
The banks have been named TBTF. This mean they CANNOT fail. This means the govt of the political class will act to ensure they do not.
One way or the other. They will BELIEVE in what they do. They will BELIEVE their own words.
You know, the Arab Spring.
Say, isn’t it funny where libertarian, true conservatism and Marxian verbage meet?
One hope is that some people think the Feds don;t have a legal basis for this
This time, though, they are talking about something that white, black, asian, latino, muslim, christian, jew, zoroastrian, sikh, buddhist, and every bokononist cares about.