patrick.net

 
  forgot password?   register

#housing #investing #politics more»
756,819 comments in 77,896 posts by 11,081 registered users, 4 online now: drBu, errc, Onvacation, Tim Aurora

new post

Are Negative Interest Rates Coming to The U.S.?

By smaulgld   2014 Jun 5, 12:47am   1 link   3,975 views   28 comments   watch (0)   quote      

The European Central Bank announced that they will be instituting negative interest rates.

That means bank customers (banks holding deposits at the European Central Bank) will have to pay to keep their money there.

Banks that pay the ECB to hold their Euros are not going to want to pay interest to depositors for their Euros. European banks may eventually pass along this "cost" to their depositors. This will make holding money in the bank not just futile but a money losing endeavor.

Could negative interest rates happen in the United States?

Federal Reserve Chair, Janet Yellen is on record of being in favor of negative interest rates.

“Accommodative policy is appropriate, in my view, because the economy is operating well below its potential and inflation is undesirably low. If it were positive to take interest rates into negative territory I would be voting for that” – San Francisco Federal Reserve Bank President Janet Louis Yellen – February 2010

Upon receiving word that Ms. Yellen would be the nominee we wrote: “…we will have gone from the low interest rate policies of Alan Greenspan, to the no interest rate policies of Ben Bernanke to the negative interest rates of Janet Yellen.”

http://smaulgld.com/negative-interest-rates-and-janet-yellen/

#investing

Comments 1-28 of 28     Last »

1   Strategist   2014 Jun 5, 1:46am     ↑ like   ↓ dislike   quote    

This is not good. It indicates more loosening by the fed reserve if Europe does not get its act together.
No wonder gold is up so much. I would have thought the dollar would be up too, but it's slightly Down.
Let's hope it's the last push to get the damn economy moving again.

2   smaulgld   2014 Jun 5, 1:49am     ↑ like (1)   ↓ dislike   quote    

Strategist says

This is not good. It indicates more loosening by the fed reserve if Europe does not get its act together.

No wonder gold is up so much. I would have thought the dollar would be up too, but it's slightly Down.

Let's hope it's the last push to get the damn economy moving again.

Agree, it is designed to make banks lend the money to get a return rather than to hold it-if they hold it, they have to pay interest to the ECB!

3   Strategist   2014 Jun 5, 1:52am     ↑ like   ↓ dislike   quote    

smaulgld says

Strategist says

This is not good. It indicates more loosening by the fed reserve if Europe does not get its act together.

No wonder gold is up so much. I would have thought the dollar would be up too, but it's slightly Down.

Let's hope it's the last push to get the damn economy moving again.

Agree, it is designed to make banks lend the money to get a return rather than to hold it-if they hold it, they have to pay interest to the ECB!

It's happening in the US too. Institutions are just holding on to the money rather then putting it to productive use like lending to businesses and home buyers.
I'm delightfully surprised the stock market is moving up.

4   smaulgld   2014 Jun 5, 2:00am     ↑ like (2)   ↓ dislike   quote    

Strategist says

It's happening in the US too. Institutions are just holding on to the money rather then putting it to productive use like lending to businesses and home buyers.

I'm delightfully surprised the stock market is moving up.

Correct and as we discussed the other day, they are using it to buy back their shares instead of investing in people and equipment.
These types of central bank efforts try to force behavior that the companies in their own interest don't want, so they find ways to take the gift and not provide the behavior.

5   P N Dr Lo R   2014 Jun 5, 2:09am     ↑ like   ↓ dislike   quote    

Strategist says

Let's hope it's the last push to get the damn economy moving again.

Always less, never enough.

6   APOCALYPSEFUCKisShostikovitch   2014 Jun 5, 3:13am     ↑ like (4)   ↓ dislike   quote    

It's not called the PRISON GANG RAPE ECONOMY for nothing.

7   donjumpsuit   2014 Jun 5, 3:28am     ↑ like (1)   ↓ dislike   quote    

If banks are going to charge me for keeping my money.

I am going to have to go ahead and charge banks for giving me a loan.

8   smaulgld   2014 Jun 5, 3:36am     ↑ like   ↓ dislike   quote    

donjumpsuit says

If banks are going to charge me for keeping my money.

I am going to have to go ahead and charge banks for giving me a loan.

Better off putting money in an insured vault if you don't get interest from a bank

9   smaulgld   2014 Jun 5, 4:42am     ↑ like (2)   ↓ dislike   quote    

bgamall4 says

With a cashless society, the banksters would force you to loan them money and keep your money with them. Then they would take some with negative interest rates.

Then there can be no complaints of theft- its part of the deal- you pay the banks to hold your money.

10   Strategist   2014 Jun 5, 4:47am     ↑ like   ↓ dislike   quote    

bgamall4 says

APOCALYPSEFUCKisShostikovitch says

It's not called the PRISON GANG RAPE ECONOMY for nothing.

But that is not the half of it. I write in the ebook, Wicked Zionism, that Larry Summers wants a cashless society. With a cashless society, the banksters would force you to loan them money and keep your money with them. Then they would take some with negative interest rates.

So, cashless plus negative is totalitarianism. Just FYI.

What happens when rates increase?
The zionists would be forced to give you interest.

11   Bubbabeefcake   2014 Jun 5, 5:27am     ↑ like (1)   ↓ dislike   quote    

Negetive interest rates in Europe is an act of desperation and there is gonna be a push back.......just give it a couple days!

12   smaulgld   2014 Jun 5, 5:35am     ↑ like (2)   ↓ dislike   quote    

Bubbabear says

Negetive interest rates in Europe is an act of desperation and there is gonna be a push back.......just give it a couple days!

I think its a coordinated central bank effort designed to get European banks to buy us treasuries as the Fed tapers.
http://smaulgld.com/negative-interest-rates-europe-means-europe-buys-u-s-treasuries/

13   marcus   2014 Jun 5, 5:56am     ↑ like (1)   ↓ dislike   quote    

Negative real interest rates are already here, for the banks.

14   smaulgld   2014 Jun 5, 5:58am     ↑ like   ↓ dislike   quote    

15   Bubbabeefcake   2014 Jun 5, 5:58am     ↑ like (1)   ↓ dislike   quote    

marcus says

Negative real interest rates are already here, for the banks.

Yep! and it's called QE....

16   Analyzer   2014 Jun 5, 6:24am     ↑ like (2)   ↓ dislike   quote    

Strategist says

I'm delightfully surprised the stock market is moving up.

Keep riding this stock market wave, but don't be so greedy as to not get out at some point.

17   Bubbabeefcake   2014 Jun 5, 6:33am     ↑ like (1)   ↓ dislike   quote    

Analyzer says

Strategist says

I'm delightfully surprised the stock market is moving up.

Keep riding this stock market wave, but don't be so greedy as to not get out at some point.

It has flashing warning lights and sirens already but nobody is giving any heed

18   Analyzer   2014 Jun 5, 6:36am     ↑ like   ↓ dislike   quote    

Bubbabear says

Analyzer says

Strategist says

I'm delightfully surprised the stock market is moving up.

Keep riding this stock market wave, but don't be so greedy as to not get out at some point.

It has flashing warning lights and sirens already but nobody is giving any heed

Are you sure, we can run for a while longer. The Fed is in support.

19   Strategist   2014 Jun 5, 6:41am     ↑ like (1)   ↓ dislike   quote    

Analyzer says

Bubbabear says

Analyzer says

Strategist says

I'm delightfully surprised the stock market is moving up.

Keep riding this stock market wave, but don't be so greedy as to not get out at some point.

It has flashing warning lights and sirens already but nobody is giving any heed

Are you sure, we can run for a while longer. The Fed is in support.

The fed is your friend. Any warning signs will be addressed by the fed.
Getting out is the hard part. I screw up half the time.

20   corntrollio   2014 Jun 5, 6:42am     ↑ like   ↓ dislike (1)   quote    

marcus says

Negative real interest rates are already here, for the banks.

Negative real interest rates are already here for me to poop on. Even the best online savings accounts have probably been giving 1% or lower for the last few years. Inflation since 2009 (according to CPI) is over 10%. Of course, if you've been holding inflation-protected bonds, you may have been doing okay on this measure.

21   marcus   2014 Jun 5, 6:45am     ↑ like   ↓ dislike (1)   quote    

Bubbabear says

marcus says

Negative real interest rates are already here, for the banks.

Yep! and it's called QE....

Well, I was referring to the short term rates that are set by the fed. That is fed funds and the discount rate, and to a lesser degree T-BIll rates which they tweak through repos and matched sales in the T-Bill market. But even the prime rate (about 3.25) reflects an extremely low real interest rate. Although I don't know that that rate is widely available to businesses.

22   Strategist   2014 Jun 5, 6:47am     ↑ like   ↓ dislike   quote    

corntrollio says

marcus says

Negative real interest rates are already here, for the banks.

Negative real interest rates are already here for me to poop on. Even the best online savings accounts have probably been giving 1% or lower for the last few years. Inflation since 2009 (according to CPI) is over 10%. Of course, if you've been holding inflation-protected bonds, you may have been doing okay on this measure.

15 year mortgages in real terms and after tax benefits are not too far from zero.
What a deal.

23   Analyzer   2014 Jun 5, 7:15am     ↑ like   ↓ dislike   quote    

Strategist says

The fed is your friend. Any warning signs will be addressed by the fed.

Getting out is the hard part. I screw up half the time.

I have improved my track record in the stock market by simply doing the opposite of what I think is right...................

24   Strategist   2014 Jun 5, 7:17am     ↑ like   ↓ dislike   quote    

Analyzer says

Strategist says

The fed is your friend. Any warning signs will be addressed by the fed.

Getting out is the hard part. I screw up half the time.

I have improved my track record in the stock market by simply doing the opposite of what I think is right...................

So tell us what you think is right today.

25   smaulgld   2014 Jun 5, 7:42am     ↑ like   ↓ dislike   quote    

Call it Crazy says

Yep, right up to the point that you get Cyprused...

Yes if they take more than the pre agreed amount!

26   smaulgld   2014 Jun 5, 7:45am     ↑ like   ↓ dislike   quote    

Strategist says

The fed is your friend. Any warning signs will be addressed by the fed.

Getting out is the hard part. I screw up half the time.

The Fed is your Friend unless its enemies get the better of it then there is nothing the Fed can do to help.
They have created this false Potemkin village recovery.
http://smaulgld.com/five-long-years-in-the-feds-potemkin-qe-village/

The question remains- what happens after the next crash- will the Fed be able to pick up the pieces again or are they out of bullets?
http://smaulgld.com/what-happens-after-the-next-stock-market-crash-poll/

27   Analyzer   2014 Jun 5, 8:46am     ↑ like (1)   ↓ dislike   quote    

Strategist says

Analyzer says

Strategist says

The fed is your friend. Any warning signs will be addressed by the fed.

Getting out is the hard part. I screw up half the time.

I have improved my track record in the stock market by simply doing the opposite of what I think is right...................

So tell us what you think is right today.

Sell

28   John Bailo   2014 Jun 5, 11:32am     ↑ like (1)   ↓ dislike   quote    

What we should be doing is handing out millions to anyone who has the slightest bit of a business idea especially if they plan to hire a lot of people.

Comments 1-28 of 28     Last »

users   about   suggestions   contact  
topics   random post   best comments   comment jail  
10 reasons it's a terrible time to buy  
8 groups who lie about the housing market  
37 bogus arguments about housing  
get a free bumper sticker:

top   bottom   home