[Alberta's Child]

BUT, when we borrow money from the banks (to buy a home or a car for example) that money will be booked at a positive interest rate. Count on it. They will NOT be paying you to borrow money from them.

Of course not. But from a monetary standpoint you shouldn't look at the banking transaction as a separate and distinct transaction from the purchase of the asset or product that it is financing. I'm looking at deflation as an overall trend in our financial system, not as it relates to one transaction. The bank will always make money, but the deflation would be seen in a discount on the price that is paid for the asset or product.

[Garth Tater]

No. You seem to be strangely fixated on this "deflationary environment." I've already shown you how holding on to your money would be better than loaning it out at a negative rate and you have had no response to this. I've explained in post #51 why WE will have negative interest rates and THEY will have positive interest rates. Negative interest rates have nothing to do with a deflationary environment and trying to justify it by saying it is PART of an overall transaction that includes the purchase of an asset also does not explain WHY we will have negative interest rates. I explained this to you in #51.

Money is created out of nothing (I can explain this to you if you wish, but I hope you already know it) and since it is created out of nothing it is NOT subject to the usual economic rule of supply and demand where a price is set - that price in a market for money is the interest rate. They can supply all the money they desire at ANY interest rate they desire in the snap of the fingers or the press of a computer keyboard. Negative interest rates are a requirement for their game to go on - not a result of market forces or a deflationary environment.