The term NEGATIVE INTEREST RATE is precisely why Lehman 2008 Occurred
Well, since we killed Glass Steagal, beginning with J Carter’s stripping of FDR’s redlining higher risk mortgages to protect banks, as racist, and then killed it off completely making savings banks and commercial underwriting operations one and the same (and it was sold at the time in order to make American banks more ‘competitive’) - we all know the orgy of ‘financial product’ invention, marketing and orgy of derivative products and the insurance industry this spawned (the movie follows the book almost exactly - which is a factual bio of the people who saw through it all). We then bailed out the people who invented the worldwide disaster to the tune of $13,000 for every American family.
So now things have REALLY gotten so bad as a result of (in order) the bubble, bailout, higher capital requirements of banks (killing loans), loss of confidence, loss of demand, loss of production, loss of savings and then loss of more loans, all of which required the fed to nearly STOP charging interest since while injecting (printing) $$ into the system … the Feds now want to CHARGE you for you HOLDING your money in a bank.
NEGATIVE INTEREST RATE. CDO, Credit default swaps, Tranche, Collateralized Security .. all terms which obfuscate the reality of the ‘product’ or action.
Telegraph UK:
The Bank of Japan joined the negative interest rate club at the end of January. Japan, along with Denmark, Sweden, Switzerland and the eurozone are effectively penalising commercial banks…. Negative rates, coupled with weak earnings growth in some of the world’s largest lenders, and concerns over new EU “bail-in” laws designed to force investors to take the hit from bankruptcies, all weighed on bank shares.
You may have heard this is ‘LIMITED’ to commercial banks, but this will have to be passed on sooner or later, and we all should remember CYPRUS, where desperate commercial and other banks levied private accounts because the govt could NOT bail them out, and the EU WOULD NOT..
I have been seeing articles for a week indicating this is REALLY under serious consideration, because these people are PETRIFIED it’s all going to go to pieces (right in front of a presidential election…AGAIN), and they will have BOTH an economic crisis (WORLDWIDE) and a political crisis. So their brians are screaming at them “DO SOMETHING”.
Ergo, this brilliant idea, which Americans who retain ANY confidence in banks will interpret as a ‘get all your cash the day it arrives by pay or from your 401ks safe deposit box stimulus program‘ or we will see the home safe and gun industries EXPLODE into the sunshine of ever more rapid growth. The govt will get its wish of cash not laying around in banks doing nothing, and instead we will hoard every cent we can, away from the govt eye because we will be certain the next step or the one after that will be … COMPULSION.
Negative interest is already confiscation.
The banks have been named TBTF. This mean they CANNOT fail. This means the govt of the political class will act to ensure they do not.
One way or the other. They will BELIEVE in what they do. They will BELIEVE their own words.
You know, the Arab Spring.
Say, isn’t it funny where libertarian, true conservatism and Marxian verbage meet?
One hope is that some people think the Feds don;t have a legal basis for this
Fed May Lack Legal Authority for Negative Rates: 2010 Memo
But that’s never really been a problem for this current version of govt which exists by executive fiat, justified in its own head by lack of willingness to compromise with it, and depending on the opposition to stop them by court invention on behalf of that ‘flawed document’
This time, though, they are talking about something that white, black, asian, latino, muslim, christian, jew, zoroastrian, sikh, buddhist, and every bokononist cares about.
YOUR MONEY YOU GET EVERY 2 WEEKS. Your pension and social security you get once a month.
Is there ANY confidence left in the the govt of the USA?
-
Are you ready to get paid in Euros? Yen? British pounds? How about a whole new world currency? Businessweek: Central Banks Prepare to Distribute Foreign Currency at Home By Craig Torres Nov. 30 (Bloomberg) -- The Federal Reserve and five other central...
- Time Magazine: The Case For Nationalizing The Entire Economy
Is this some sort of hip joke? From Time: The advocates for nationalizing U.S. banks have been out in force recently.Senator Lindsay Graham, who almost certainly does not have a PhD in economics or finance told ABC News that banks were in such deep trouble...
- Banks Hoarding Cash, But There's A Bull Market Coming
From 3 Wood at Jammie Wearing Fool: With all the market unrest, and the year end reporting coming up soon, it appears that banks have resumed hoarding cash to make their balance sheet look better to investors.The cost of borrowing in dollars for one...
- Non-muslims Turn To Islamic Bank As A Safe Option
THE BIRMINGHAM POST: Growing numbers of non-Muslims are turning to Islamic banking as customers spooked by turmoil in the Western banking system increasingly see the sector as a safe haven. The Birmingham-headquartered Islamic Bank of Britain said it...
