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Old 03-07-2016, 08:33 PM   #1
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Default Back to the drawing board .

Those negative interest rates ( NIRP ) , currently the darling of desperate
government economists , do not work as planned .

Apparently NIRP are more likely to scare the affluent instead of spending they save .

How do we know ?

Well because that is what has been happening in Japan ?

Well inflation never rose for a variety of reasons (not the least of which was
that QE and ZIRP actually contributed to the global disinflationary impulse)
and nothing will incentivize savers to keep their money in the bank like the expectation of deflation.
Who would have thought , scared people save .

Full article here .

All paper is a short position on gold . “Gold is money. Everything else is credit.”

“If we don’t believe in freedom of expression for people we despise, we don’t believe in it at all.” ( Noam Chomsky )

‘you can judge a man’s spirit by the amount of truth he can tolerate.’ .... Nietzsche

Last edited by Ross; 03-08-2016 at 06:06 AM.
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Old 03-07-2016, 09:06 PM   #2
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No kidding, eh? Why anyone would have thought negative rates would encourage investing splurges is beyond me.
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Old 03-08-2016, 04:05 AM   #3
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It boggles the mind. Only deposit accounts and shareholders' equity count as bank reserves. If banks do even more to discourage deposits, then the amount of money they can borrow at the Fed's discount window and lend out will fall. Less lending means less deals being financed, equals less investment. The "fear effect" discussed in the article exacerbates this further because folks will keep more money in cash and avoid riskier investments.

Am I missing something here?
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back, board, drawing

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