Posted on 10/24/2015 5:12:37 PM PDT by SeekAndFind
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 sluggish — that some central bankers are seriously discussing whether they should drive interest rates into negative territory in the future, as a sort of economic punishment for not spending money. The theory is that if you are deterred from keeping cash in the bank you'll withdraw it and spend some of it, thus creating economic growth.
Europe's central banks and the US Federal Reserve have kept interest rates near zero for years now in the hopes of making money cheap to borrow. The intent is that because it costs next to nothing to borrow money, you'll take advantage of that and invest it in anything that pays more than a 0% return. That usually creates inflation too, as the influx of cheap, new cash devalues the existing stock.
But inflation is nowhere to be seen. The price of oil has fallen dramatically, making anything that requires fuel cheaper. And with prices falling, people hold off on spending today because they know their money will be worth more tomorrow. That lack of economic activity despite the cheapness of lending is exactly what is holding the economy back.
(Excerpt) Read more at businessinsider.com ...
Agreed. Dropping rates has proven to be like shooting pool with a rope. Raising rates, though, might choke off what growth we have now, to hear them tell it. I don’t know either.
But just the fact that it is a TRUST account should say to them, it is normally not busy.
Yeah. Will the IRS turn a negative interest payment into a negative tax?
No.
This is confiscation.
It’s true that zero rates may be propping up the stock market, as you can’t go anywhere else to get a return. It remains to be seen how markets will react to a gradual but sustained run up of rates. Will people yank their money out?
Just before the run on banks, there’ll be a run on home safes.
Fine... Negative interest on my farm mortgage.
RE: Fine... Negative interest on my farm mortgage.
NOPE. Negative on your deposits, POSITIVE on your mortgage.
Banks still have to make money and they make money on you.
So, what’s the difference between a wiseguy in a suit saying,”Hey, for a small fee, I can prevent your business from burning down.” and a banker I’m a suit saying, “Hey, for a small fee, I can protect your money from disappearing, and use it to make money for me.”
It is with GOOD REASON they are called ‘banksters’!
I work for a very large international bank. Negative Interest Rates have been in the works for well over a year, dating back to when Cyprus banks raided their depositor's bank accounts and IIRC Greece did/considered doing the same thing.
We raced to modify our software systems to enable negative rates, completing that work about 6 months ago now.
I'm telling you all, the Federal Government is so hungry for YOUR MONEY negative interest rates WILL BE IMPLEMENTED at some point. Federal Government's hunger for your money is insatiable, and they genuinely believe negative interest rates will force consumers to SPEND and boost the economy.
You've all been warned.
First National Bank of Sealy. They not only are fee free they don’t follow federal reporting requirements and their branches are open 24/7/365.
RE: So, what’s the difference between a wiseguy in a suit saying,”Hey, for a small fee, I can prevent your business from burning down.” and a banker I’m a suit saying, “Hey, for a small fee, I can protect your money from disappearing, and use it to make money for me.”
The wise guy goes to jail. The Banks get rescued with your tax dollars.
These banks need to be put in their place. Crony capitalists all. And globalists.
Yes! THAT is the sad part. IF your RICO laws were FULLY enforced, the US economy could be righted JUST on ‘shovel ready jobs’ building all the prisons needed to house all the criminal politicians, banksters and ‘crony capitalists’!
Between the Federal Government and the FED. they have have already killed the average consumer with low interest rates. They not only make money on our savings they are causing our insurance to go up also. American should be about tired of being screwed by this Communist Administration. They look out for the rich,Unions,Lawyers and Government Employees! Wake up Stupid America.
sounds like they are going for the gusto. With the economy in such a downward spiral, prices of everything going through the roof (despite what the liars say) and everyone out of work I'll lay bets that deposits nationwide are so low on average that banks are beginning to get very concerned. We are in a depression, not a recession.
Mattress time.
Mr. Edwards obviously hasn't bought groceries in a while.
Savers are already being punished with interest rates near zero. This isn’t how it’s supposed to work. If they try to charge me for keeping my money, I’ll keep it in a safe deposit box in cash. Of course, that’s practically illegal now, too.
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