Post: #1

I was reading everyone's favorite economic end of times blog (Zerohedge) that the Fed and company are discussing the possibility of negative interest rates.

Something in the realm of -.0025 or something of that nature.

I'm having trouble wrapping my head around such an event. How would this affect loans, bank deposits, and the like? Will we start getting paid to take out loans?

Post: #2

http://www.armstrongeconomics.com/?s=int...mit=Search

Highly recommended reading.

Post: #3

I was trying to figure it out myself, I found a plain-language explanation here:
http://www.money-rates.com/advancedstrat...y-seem.htm

Post: #4

Interest rates are already negative in real terms. If inflation is 3%, and interest rates are 0%, you're losing 3% every year. You'd do better putting your savings into canned food.

So it already affects loans. That's part of the feds goal, to artificially stimulate people to buy houses etc with loans. Because that worked great last time.

Post: #5

Hahaha, it's always the middle class and the prudent financial ones who get fucked. All your life you're told to "save, save, save" and now you get penalized to save and have to PAY some fuckhead because you didn't spend it all. Worse, the banks who created the mess we're in right now are the ones profiting.

And on top of that, let's say you have a life savings of $250,000 and don't want to put it in a cash, well the cops can seize is legally under civil asset forfeiture because they argue "only criminals keep cash" (http://www.zerohedge.com/news/2015-05-18...hout-charg)

So it's a rigged system where you can't win.

Post: #6

Negative interest rates aren't gonna happen in North America/UK in this cycle. I'd always take Zerohedge with a healthy dose of skepctism.

Phoenix nailed it on real rates, but nominal won't hit Main Street(you and me) anytime soon. Keep in mind the -rates affect those with access to interbank and money markets(once again, not you, me or SMEs). There's a reason we get prime or prime + x%.

Of more concern is what monster posted. You'd have a higher chance, albeit unlikely depending on your circumstances/life, of having assets seized before you see -rates available. But seriously who the fuck keeps that much in cash and isn't travelling? And while I feel for the guy in the link above, that could have been avoided using...................................a bank account.