Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
US Dollar Rallies Off Support But Is This A Top Or Bottom? - 19th June 19
Most Income Investors Are Picking Up Nickels in Front of a Steamroller - 19th June 19
Is the Stock Market’s Volatility About to Spike? - 19th June 19
Facebook's Libra Crypto currency vs Bitcoin: Five Key Differences - 19th June 19
Fed May Trigger Wild Swing In Stock Index and Precious Metals - 19th June 19
How Long Do Land Rover Discovery Sport Brake Pads Last? - 19th June 19
Gold Golden 'Moment of Truth' Is Upon Us: $1,400-Plus or Not? - 18th June 19
Exceptional Times for Gold Warrant Special Attention - 18th June 19
The Stock Market Has Gone Nowhere and Volume is Low. What’s Next - 18th June 19
Silver Long-Term Trend Analysis - 18th June 19
IBM - Watson Deep Learning - AI Stocks Investing - Video - 18th June 19
Investors are Confident, Bullish and Buying Stocks, but… - 18th June 19
Gold and Silver Reversals – Impossible Not to Notice - 18th June 19
S&P 500 Stuck at 2,900, Still No Clear Direction - 17th June 19
Is Boris set to be the next Conservation leader? - 17th June 19
Clock’s Ticking on Your Chance to Profit from the Yield Curve Inversion - 17th June 19
Stock Market Rally Faltering? - 17th June 19
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

When Saving Interest Rates Go Negative

Interest-Rates / US Interest Rates Dec 04, 2013 - 10:27 AM GMT

By: BATR

Interest-Rates

What is more frightening, then the loss of your money. Since most people have, some meager amount held in some form of a financial institution, the prospect of the banksters' cabal placing a charge against your account for the mere privilege of maintaining a deposit, is horrible. The Business Insider warns, In The Future, You May Have To Pay The Bank To Hold Your Money, and raises a very dreadful prospect.


"In recent weeks, economists have discussed the idea of how to implement a negative interest rate while preventing people from hoarding paper currency. Economist Miles Kimball has discussed creating an electronic currency and having an exchange rate between it and dollar bills. Others have discussed going cashless and eliminating paper currency altogether."

Negative interest rates simply mean it will cost you, in fees or service charges, to hold money in banking accounts. Examine Professor Kimball’s ivory tower justification for seizing the value and purchasing power of your savings.

"University of Michigan economist Miles Kimball has developed a theoretical solution to this problem in the form of an electronic currency that would allow the Fed to bring nominal rates below zero to combat recessions. He's been presenting his plan to different economists and central bankers around the world. Kimball has also written repeatedly about it and was recently interviewed by Wonkblog's Dylan Matthews."

Now dig deep into the mind of a mentally ill pseudo intellectual to see just how far from rational money policy such monetary eggheads go to provide cover for the fractional reserve central bankers.

"If we repealed the "zero lower bound" that prevents interest rates from going below zero, there would be no need to rely on the large scale purchases of long-term government debt that are a mainstay of "quantitative easing," the quasi-promises of zero interest rates for years and years that go by the name of "forward guidance," or inflation to make those zero rates more potent."

This threat is a continuation from the initial trial balloon that appeared in the Financial Times. A video rant about, Banks to Start Charging You on Deposits, goes ballistic with outrage that the money-centered banks are emboldened as to telegraph their intentions of raiding the nest egg savings of depositors. While the justifiable emotion is understandable for a beleaguered public, the economic aftermaths of interjecting massive QE reserves is explained well by Zerohedge in recent reports with the accompanied chart.

"Furthermore, contrary to what the hypocrite banker said that "the danger is that banks are pushed into riskier assets to find yield", banks are already in the riskiest assets: just look at what JPM was doing with its hundreds of billions in excess deposits, which originated as Fed reserves on its books - we explained the process of how the Fed's reserves are used to push the market higher most recently in "What Shadow Banking Can Tell Us About The Fed's "Exit-Path" Dead End."

What the real danger is, is that once the Fed lowers IOER and there is a massive outflow of deposits, that banks which have used the excess deposits as initial margin and collateral on marginable securities to chase risk to record highs (as JPM's CIO explicitly and undisputedly did) that there would be an avalanche of selling once the negative rate deposit outflow tsunami hit."

Hence, this move to prepare the bank customer for another hosing by imposing negative rates actually is a desperate attempt to keep the derivative "day of reckoning" from hitting. This strategy will not work. In the Negotium article, Low Interest Rates Impoverish Savers, makes the point: "Designed lowering of our standard of living is visible at every turn. The money-centered banks recapitalized their balance sheets at the expense of the passbook accounts customers."

With the expectation that bank accounts will actually experience debit fees for parking money will result in a massive outflow of capital. Where will the money go? Will the banks allow the return of your deposits in cash or will they impose significant costs and delay withdrawals?

Consider that under a banking system, which automatically reduces your balances, the acceleration of stripping your net worth goes into high gear. No sane individual would accept this theft willingly. However, the transition to a cashless economy might well inflict a call back of cash (Federal Reserve Notes) in circulation for an enforced substitute legal tender. Or else some variation of the "killer" Kimball electronic compulsory account may be imposed under strict governmental supervision.

Under such a circumstance, the mandatory medium of exchange strips all personal ownership from the individual. Money, in whatever form it takes, no longer will be your own property.

Negative interest rates institutionalize systemic inflation into every transaction. Throughout history, usury is condemned for charging interest on lending. What term should be used for paying no interest on capital saved? Anthony Migchels argues in Our Chains are Forged by Usury, that the objective is to create an interest-free money supply. Much like the Kimball electronic currency, the Migchels alternative resides in his own twisted hermitage, read accordingly.

"The problem is not the creation of money! Quite the opposite: it's marvelous that we never need to have a shortage of money. The problem is when the bookkeeper starts raping the debitor with interest for no other reason than the associated minus."

While debt is the central issue in all financial bubbles, the solution is not to destroy wealth creation through capital saving. Until a universal model of wizardry or alchemy is adopted that creates a stable store of value, independent from work, ingenuity or greed; expectations of an interest free currency are pipe dreams.

The benefits from negative interest rates all go to the banksters. The borrower never sees FREE interest loans, nor does the saver earn a fair rate of return. The maxim remains, Those with the Gold, Make the Rules, is no different in the age of the New World Order of central banking. Starving the saver is negative for the rest of us.

James Hall – December 4, 2013

Source : http://www.batr.org/stupid/112513.html

Discuss or comment about this essay on the BATR Forum

http://www.batr.org

"Many seek to become a Syndicated Columnist, while the few strive to be a Vindicated Publisher"

© 2013 Copyright BATR - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors

BATR Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules