{"id":14605,"date":"2015-11-21T08:51:19","date_gmt":"2015-11-21T13:51:19","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14605"},"modified":"2015-11-21T08:51:19","modified_gmt":"2015-11-21T13:51:19","slug":"hang-onto-your-wallets-negative-interest-the-war-on-cash-and-the-10-trillion-bail-in","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14605","title":{"rendered":"Hang Onto Your Wallets: Negative Interest, the War on Cash, and the $10 Trillion Bail-in"},"content":{"rendered":"

Hang Onto Your Wallets: Negative Interest, the War on Cash, and the $10 Trillion\u00a0Bail-in<\/a><\/h3>\n
In uncertain times, \u201ccash is king,\u201d but central bankers are systematically moving to eliminate that option. Is it really about stimulating the economy? Or is there some deeper, darker threat afoot?<\/em><\/div>\n
\n

Remember those old ads showing a senior couple lounging on a warm beach, captioned \u201cLet your money work for you\u201d? Or\u00a0the scene in\u00a0Mary Poppins<\/em><\/a>\u00a0where young Michael is being advised to put his tuppence in the bank, so that it can compound into \u201call manner of private enterprise,\u201d including \u201cbonds, chattels, dividends, shares, shipyards, amalgamations . . . .\u201d?<\/p>\n

That may still work if you\u2019re a Wall Street banker, but if you\u2019re an ordinary saver with your money in the bank, you may soon be paying the bank to hold your funds rather than the reverse.<\/span><\/p>\n

Four European central banks \u2013 the European Central Bank, the Swiss National Bank, Sweden\u2019s Riksbank, and Denmark\u2019s Nationalbank \u2013\u00a0have now imposed negative interest rates<\/a>\u00a0on the reserves they hold for commercial banks; and discussion has turned to whether it\u2019s time to pass those costs on to consumers. The Bank of Japan and the Federal Reserve are still at ZIRP (Zero Interest Rate Policy), but\u00a0several Fed officials have also begun calling for NIRP<\/a>\u00a0(negative rates).<\/p>\n

The stated justification for this move is to stimulate \u201cdemand\u201d by forcing consumers to withdraw their money and go shopping with it. When an economy is struggling,\u00a0it is standard practice<\/a>\u00a0for a central bank to cut interest rates, making saving less attractive. This is supposed to boost spending and kick-start an economic recovery.<\/p>\n

That is the theory, but central banks have already pushed the prime rate to zero, and still their economies are languishing. To the uninitiated observer, that means the theory is wrong and needs to be scrapped. But not to our intrepid central bankers, who are now experimenting with pushing rates\u00a0below<\/em>\u00a0zero.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Hang Onto Your Wallets: Negative Interest, the War on Cash, and the $10 Trillion\u00a0Bail-in In uncertain times, \u201ccash is king,\u201d but central bankers are systematically moving to eliminate that option. Is it really about stimulating the economy? Or is there some deeper, darker threat afoot? Remember those old ads showing a senior couple lounging on […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1035,1034,124,233,6716,282,303,305,1154,536,10687,1768,1389,3471,1555,860,7693],"class_list":["post-14605","post","type-post","status-publish","format-standard","hentry","category-economics","tag-cash","tag-cashless-society","tag-central-banks","tag-ecb","tag-ellen-brown","tag-european-central-bank","tag-fed","tag-federal-reserve","tag-interest-rate-policy","tag-money","tag-national-bank","tag-negative-interest-rate-policy","tag-nirp","tag-riksbank","tag-swiss-national-bank","tag-wall-street","tag-web-of-debt"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14605","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14605"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14605\/revisions"}],"predecessor-version":[{"id":14606,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14605\/revisions\/14606"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14605"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14605"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14605"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}