Skip to comments.NEGATIVE INTEREST ON PRIVATE BANK ACCOUNTS COMING TO THE US?
Posted on 06/07/2014 9:53:10 PM PDT by kingattax
We just reported about how the European Central Bank has instituted negative interest rates for member banks. This could soon spread to the US and also to consumer accounts. If so, you would find money taken out of your bank account each quarter unless you spend it.
The idea is that if low rates are not yet persuading you to spend, then why not punish you even more for saving?
To make this more effective, there would also be a push for all electronic money to keep you from stashing any away from the confiscation agents. Ken Rogoff, leading Harvard (and Republican) economist has just recommended this as a first step toward implementing negative interest rates in the US.
This is far from the only innovation that could be coming our way. In a speech on June 4, San Francisco Fed Chairman John Williams suggested that the Fed should consider nominal income targeting. He said this could be a creative way to bend the curve in terms of macroeconomic and financial stability trade-offs. What this gobbledegook means is that the Fed would simply create money and then distribute it to parties in danger of bankruptcy and foreclosure.
Isnt that a great idea? Why stop with the bail-out of big banks when you can bail out anyone who gets in financial trouble? That would guarantee the zombification of the economy that is already well underway.
Bad business ideas and badly managed companies would live forever at the expense of good ideas and well managed companies
(Excerpt) Read more at breitbart.com ...
I’m already getting negative...I’m paralyzed with fear and don’t know which way to go....
with all the fees for actually using your money, might as well say we have it now. lol.
all this negativity is going to make the water go bad
Couches here we come..
Can you elaborate?
During the Depression, Alberta Premier Bill Aberhart, did a form of negative interest rates by issuing scripts that would constantly lose value over time.
It was done to keep the people spending money and not saving it.
What a great idea? What could possibly go wrong?
Your banker has no regard for human life, not even his own. For this reason, men, I want to impress upon you the need for extreme watchfulness while carrying out banking transactions.
So as not to contaminate your precious bodily fluids.
With “quantitative easing”, aka fiat currency, aka government plunder so extreme, only fools will have any investments linked to the value of the dollar. Inflation is inevitable.
Gold, silver, bullets.
All that needs to happen next to kill the global eco system is have money exchange centers where checks can be cashed and the need for banks will diminish; they will kill themselves off if they do this.
Banking is War!
When most of discretionary money is confiscated by the gov’t, the only entertainment left will be sex. I expect birth rates to go up!
The water will become depressed and cause people who drink it to say mean things about Gwyneth Paltrow...
Be square and you should be okay.
See California, even sex will require government forms to be filled out.
I did not know there was such a thing as Sad Water Poems...
And war is, hey diddly diddly, bo diddly .... heck!
So, head down, feet firmly planted, interlocking grip,
we smash the bankers, driving them before us, denying their women our essence and singing lusty songs of victory.
Hi hoohhhhhh! Hi hoohhhhhh! It’s off to work we go ....
NTI can probably relate to this short story.... I think it is written in crazy....
You’re not going to bring up her embarrassing armpit odor, are you? She can’t help it if she has stanky pits. Poor girl has tried everthin’: Old Spice roll on, Gold Bond powder, Janitor-in-drum. Nothin works for her.
“See California, even sex will require government forms to be filled out.”
Only if you are of college age.
Well, I was going to be diplomatic and describe them as “possessing an earthy odor.”
Now that I think of it, Dapper—I’ve never seen you drink a glass of water.
How about a nice, tall glass of ........ VODKA, comrade!?
Have you ever picked your feet in Poughkeepsie?
Don’t think about it—Yes or No.
Well, it would keep her busy doing something other than, uh, well...
The roadies for Coldplay said the smell could knock a buzzard off a gut wagon. So yeah, pungent like Pepe Le Pew on a hot day.
Uh, oooooo.....kay, why would anyone keep anything in the bank at all in that scenario?
Perhaps she maintains a compost pile under there...
When I was a wee lad, I learned that banks make THEIR money by using yours to invest. In exchange, they pay you interest.
If interest goes negative, what fool would keep his money in any bank?
And how will banks make income if everyone withdraws their funds?
Seems like a recipe for a complete collapse of banking.
Frankly, I'm ready to withdraw all funds right now, because 0.15% ain't worth $hit, anyway.
And I have to report that juicy $20 per year in interest income on my taxes.
It simply is not worth my time for even that lowly amount.
The only reason I don't withdraw everything now, is that I have all of my bills paid by bank transfer.
Guess I could get used to writing checks again.
Oh, wait, that won't work.
Guess I'll have to start obtaining money orders.
Somebody please explain this to me. What is negative interest? is that where I have to pay to keep my money in the bank?
If I take all my cash out and the government catches me with it, do they seize it?
You describe the Carter years.
That's odd. No one has beaten Rogoff till he puked blood?
Vehicle payment schemes (anti-ownership payment to) real estate mortage (anti-ownership), are not moving for the leach “own payments to” group. The cash-for-clunker scam was to crash the affordable ownership opportunity to benefit the payment to anti-ownerships (banks again).
the only entertainment left will be sex. I expect birth rates to go up!
Might help countries in Europe who’s negative birth rate’s
are making them extinct~~
For lots of folks, bank savings accounts with a 0.1 rate of return and a five or ten buck or more maintenance fee have been paying negative interest for years..
The central bankers have been giving the banks money at zero percent interest and they have for the most part refused to lend.
This amounts to a maintenance fee by the sovereign lenders on the big banks.
If it were not for oil producing nations keeping the cost of crude artificially high, the deep deflationary depression we have been mired in since 2008, would be apparent and the bankers would not have to play games with the numbers..
Negative interest rates are rates that banks will charge depositors. They are really negative rates, and not just that are below inflation. Banks tend to pay them when they aren’t able to charge lenders a lot of interest, because make their money on the difference between the money they lend out and the money they pay depositors.
.....by issuing scripts that would constantly lose value over time.
Our entire family has moved the bulk of our funds to Charles Schwab and Ameriprise accounts. In the non-401k/Roth accounts you can write checks. I still maintain a local checking account but if they go negative I’ll talk to Schwab about what to do. Schwab and Ameriprise are not banks, but they offer the same services with some restrictions.
One approach will be to use my Schwab credit card and auto-pay all of my bills. I only write about 13 checks a year now.
The people hurt by this move will be those who can’t maintain $5,000 in an account. (In other words, the poor.)
Already, people who rent low end housing, which is $600-800 per month around here, either pay in cash or buy money orders.
The government has been selling negative interest bonds for several years to banks. Just to bring the numbers down to size, let’s say the government tells a bank, “I’ve got this ten dollar bond. You give me $10 and when the bond matures I’ll give you $9. Great deal, eh?” The bank says, “F*ck you!” The government says, “Do you still want to operate your bank? If you don’t buy my bond I’ll revoke your charter.” The banks says, “How many do you want me to buy?”
Now, since defecation flows downhill, the bank is passing along the burden.
Good pic of Oddball.
The trouble with economists is that they work with theories and assumptions, apparently in conjunction with “climate change” scientists. While negative interest rates may sound like a good idea, one needs to ask who will most likely be hurt by it? Will it be the corporations that we hear of hoarding vast amounts of cash overseas to avoid taxes or will it be the individual, more specifically the elderly retired who have had a lifetime to accumulate? The elderly are already being penalized by artificially low interest rates. I currently have more cash than at any other time in my life, but mainly out of fear. If I put it in the stock market I’ll be lucky to get a 3% return. But is a 3% return worth risking against a loss of principle if the market goes through an adjustment and rates increase? My cash is parked until I can find a rate of return with acceptable risk that will augment my retirement income and allow me to spend more. In the meantime, I have to withdraw cash monthly just to meet basic costs. I believe I’m in this holding pattern because of low interest rates which, in my opinion, benefitted young people, those with a regular job/source of income, and those who over extended themselves during the boom years. I feel like economists have left the elderly to fend for themselves and that depriving them of a fair return/interest rate on cash assures that nothing will be left for the next generation.
This is such a bad move on the part of the ECB. An economy cannot continue to run when the central bank suppresses the interest rate to zero, let alone when it makes rates negative.
This will not end well.