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Originally Posted by Vendot
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Sure but so are negative interest rates. Everyone said it would never happen only because it has never happened before in history and it did and quite broadly with over 10 trillion bonds with a negative yield. Negative rates in Japan, Sweden, Switzerland etc, etc.
The world economy is a complete mess, it has to grow its way out of a serious debt hole and it's stalling so something will have to be done whether its more QE or as I said before, helicopter money:
Helicopter Money: Ben Bernanke's Plan to Hand Out Free Cash - Fortune |
Negative interest rates are not for consumer or business bank accounts or being applied toward bond yield face interest or coupon rates. Negative interest rates are only applied to the mandated bank reserve deposits and any additional funds that are placed with the central bank. Since these negative rates are so misunderstood -- here is what they mean: The central bank is telling the chartered commercial banks -- we don't want or need your money -- lend your money out to the commercial market and stimulate the economy.
In reality, the commercial banking system has become very risk advoidant and dysfunctional. The Central Banks have worsened the risk avoidance problems of the commercial banks by their actions.
The investment banks and the hedge funds are the problem -- they need to be regulated or even forced to join the central banking system The investment banks and the hedge funds are gaming the financial markets causing the problems and creating paper profits by being allowed to be the real overlords of the economy
We are more likely to have a neo-socialist movement, or even revolution, in this country (as well as other capitalist system countries) than have helicopter money fall from the sky. If you don't believe me -- just look at the #occupy movements and now the successes of the Democrat-Socialist movement of Bernie Sanders. The writing is on the wall folks -- share the wealth a bit or lose it all. Greedy pigs always lose.