Under normal circumstances, people put money into a bank and receive interest for their money. As we all know, the bank uses the depositor's money to make more money and pay some small percent to the depositor for placing the money in the bank.
Interest rates are the price paid to borrow money. The bank has borrowed the depositor's money and is paying an interest rate for the privilege of using the depositor's money.
A negative interest rate means the banks will charge negative interest meaning that instead of receiving money on deposits, depositors must pay to keep their money in the bank. At the same time, borrowers enjoy the privilege of actually earning money by taking out a loan.
Sensible depositors would withdraw their money from the bank and pay cash for purchases and store the remaining cash in their mattress at home.
Interest rates are the price paid to borrow money. The bank has borrowed the depositor's money and is paying an interest rate for the privilege of using the depositor's money.
A negative interest rate means the banks will charge negative interest meaning that instead of receiving money on deposits, depositors must pay to keep their money in the bank. At the same time, borrowers enjoy the privilege of actually earning money by taking out a loan.
Sensible depositors would withdraw their money from the bank and pay cash for purchases and store the remaining cash in their mattress at home.
Where is all of this coming from? For this entire century, Americans have been paying for a super expensive “war on terror.” Taxpayers have spent trillions of dollars enriching the the political/military/industrial complex to defeat foreign “terrorists” like the Taliban and al Quada who seem to be winning after all of these years of battle.
The fraudulent war on 'terror' along with the fraudulent bail-out of the banking system have left this country impoverished. The average American has lost approximately half of their net worth during these debacles. The terrorists couldn't have done this much damage to this country.
The purpose of current low interest rates is to support the prices of the over-leveraged and fraudalent financial instruments created by the corrupt system. They, the elite, are stealing from the average American to prop-up their 'investments' which would be and should be worth next to nothing.
Shipping middle class jobs to foreign countries steals money from the middle class and gives it to the elites. The process eliminates domestic consumer market. The economy fails to grow. The situation simply gets worse over a longer period of time.
There are only two possible solutions for the problem. One is to break up the banks. Second is to nationalize the banks and operate them for the general welfare of the nation.
Negative interest rates could be coming to America.
"We're taking a look at them ... I wouldn't take those off the table," Federal Reserve chair Janet Yellen said Thursday at a Congressional hearing. Yellen and other experts stress that the U.S. economy would have to get much worse before the Fed would contemplate such a move.
But if the U.S. does go negative, it wouldn't be alone. Five central banks -- Denmark, the Eurozone, Sweden, Switzerland and Japan -- now have negative interest rates. In fact, Sweden's central bank took its rates even deeper into negative territory on Thursday.
"We're taking a look at them ... I wouldn't take those off the table," Federal Reserve chair Janet Yellen said Thursday at a Congressional hearing. Yellen and other experts stress that the U.S. economy would have to get much worse before the Fed would contemplate such a move.
But if the U.S. does go negative, it wouldn't be alone. Five central banks -- Denmark, the Eurozone, Sweden, Switzerland and Japan -- now have negative interest rates. In fact, Sweden's central bank took its rates even deeper into negative territory on Thursday.
At least, when facing a robber with a gun, one is aware of being robbed. With the creation of fraudulent 'financial instruments' and constantly lower interest rates, one suddenly finds out that they have been robbed but isn't exactly sure when and where the robbery took place.
Our financial system is desperate and turning to measures of desperation... and that's the truth !!!
No comments:
Post a Comment