Negative Interest Rates

[Machiavelli2]

X.Playa

Ina Adeer, as we are witnessing the emergence of left leaning political leaders, Corbyn from Britain, Bernie Sanders as a legitimate serious contender for the POTUS and Hollande of France taxing the wealthy 75% tax rate and to a lesser degree Greece under the foot of Merkel, the people are fed up with the special relationships between the dual parties and big businesses.

These dual institutional frameworks are impotent to reign in big businesses and make them pay their fair share of taxes. They do share similar polices when it comes to free market economy ideals. They are the 2 faces of the same coin. But I strongly believe that neoliberalism has eroded human values, the environment and has failed the mantra that they are the panacea to solve social mobility, political and economic problems.it was claimed to be based on fair competition and as you correctly alluded to, there is no competition at all and major sectors of the economy are controlled by the few. This neo-liberal bred fear, anger, powerlessness and frustration among the masses. This fundamentalist economic system has survived for the last decade and half by the shock and fear which emanated from terrorism. How long can it survive? The jury is out to deliberate.

[Basra-]

Negative interests rates = Low interests rates like we have here in the US for the past ---how many years now?? Its nothing but a government ploy to ease lending and the economy. And besides the countries u have listed are deep socialist countries--with high welfare and spending records. What they need to do is---stop spending, and start getting a job! With all the refugees they have there--labor should not be a problem.

[X.Playa]

Basra is a Somali blond. Since when 0.001 interest rate was negative? Blondie negative means minuse and a number, for instance -0.01, that's negative

[NoAngst]

The problem with low and/or negative interest rates is they ignore the demand side of the question. Businesses will invest only if they anticipate demand for their goods and services. Right now, it's kinda hard to see where the demand will come from with real wages stagnant or falling and governments foolishly vowing to balance budgets.

Negative interest rates will perpetuate stock market and real estate bubbles as low interest rates make real estate and equity more attractive then fixed income. So, if you own capital, you'll be happy. But if you are wage-earner then good luck finding decent paying job with pension and benefits.

I'm just glad that I live in Canada with a Liberal government willing to spend its way out of recession rather than compound problems by adopting the fallacy of "cutting your way to prosperity" as championed by neo-liberalism. Just wish they'd go for bigger deficits. There is nothing inherently wrong with deficits. For governments that issue their own fiat currency, there is no revenue constraint. They don't need to "raise" taxes to spend since they FIRST spend then collect taxes. The only real constraint is the real resource base of the country. And with a lot of idle and underutilized resources (high unemployment rate, for example) deficit spending is perfectly sustainable without risking inflation.

[gurey25]

Noangst from your last paragraph you sound like you have been enlightened by the benefits of modern monetary theory (mmt).
I suggest you look into another aussie who is a leading proponent of mmt. Bill Mitchell.
Bilbo.economicoutlook.net

[Lamagoodle]

The problem with low and/or negative interest rates is they ignore the demand side of the question. Businesses will invest only if they anticipate demand for their goods and services. Right now, it's kinda hard to see where the demand will come from with real wages stagnant or falling and governments foolishly vowing to balance budgets.

Negative interest rates will perpetuate stock market and real estate bubbles as low interest rates make real estate and equity more attractive then fixed income. So, if you own capital, you'll be happy. But if you are wage-earner then good luck finding decent paying job with pension and benefits.

I'm just glad that I live in Canada with a Liberal government willing to spend its way out of recession rather than compound problems by adopting the fallacy of "cutting your way to prosperity" as championed by neo-liberalism. Just wish they'd go for bigger deficits. There is nothing inherently wrong with deficits. For governments that issue their own fiat currency, there is no revenue constraint. They don't need to "raise" taxes to spend since they FIRST spend then collect taxes. The only real constraint is the real resource base of the country. And with a lot of idle and underutilized resources (high unemployment rate, for example) deficit spending is perfectly sustainable without risking inflation.

Actually, negative IRs are generally used to stimulate demand although it starts with supply. The assumption; a virtuos circle; CB lends commercial banks and other financial institutions - the banks give a lower/or no IR to customers for deposits and lend consumers money cheaply. Given this trade-off consumption is encouraged- the inflation resulting in real wage demand.

What is happening in the EUROZONE is fascinating; there is virtually no monetary policy that can be undertaken by individual countries (e.g. Devaluations) ; fiscal policy is ok but there is a limit. Another problem; the EURO underlies the values of all other currencies in Europe and cannot undertake independent policies.

The USA is ok. The negative IR has resulted in growth and now it is back to business as usual

As several of you mentioned, at the end of the day, it is the consumer that pays for it. This is the logic of capitalism; there is no free lunch.

[Basra-]

Basra is a Somali blond. Since when 0.001 interest rate was negative? Blondie negative means minuse and a number, for instance -0.01, that's negative

X

I was talking in the general world scope view of economy. As usual--your narrow, little brain focusses on little unimportant details. U r not upto my speed---no pun intended on your weight.

[X.Playa]

Basra is a Somali blond. Since when 0.001 interest rate was negative? Blondie negative means minuse and a number, for instance -0.01, that's negative

X

I was talking in the general world scope view of economy. As usual--your narrow, little brain focusses on little unimportant details. U r not upto my speed---no pun intended on your weight.

Not taking your economic advice, but i don't mind you shaking your fat butt on some oriental music.

[FAH1223]

The problem with low and/or negative interest rates is they ignore the demand side of the question. Businesses will invest only if they anticipate demand for their goods and services. Right now, it's kinda hard to see where the demand will come from with real wages stagnant or falling and governments foolishly vowing to balance budgets.

Negative interest rates will perpetuate stock market and real estate bubbles as low interest rates make real estate and equity more attractive then fixed income. So, if you own capital, you'll be happy. But if you are wage-earner then good luck finding decent paying job with pension and benefits.

I'm just glad that I live in Canada with a Liberal government willing to spend its way out of recession rather than compound problems by adopting the fallacy of "cutting your way to prosperity" as championed by neo-liberalism. Just wish they'd go for bigger deficits. There is nothing inherently wrong with deficits. For governments that issue their own fiat currency, there is no revenue constraint. They don't need to "raise" taxes to spend since they FIRST spend then collect taxes. The only real constraint is the real resource base of the country. And with a lot of idle and underutilized resources (high unemployment rate, for example) deficit spending is perfectly sustainable without risking inflation.

Ya'll are so lucky.