{"id":15247,"date":"2015-12-14T07:06:31","date_gmt":"2015-12-14T12:06:31","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15247"},"modified":"2015-12-14T07:06:31","modified_gmt":"2015-12-14T12:06:31","slug":"are-negative-rates-fueling-deflation","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15247","title":{"rendered":"Are Negative Rates Fueling Deflation?"},"content":{"rendered":"
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Are Negative Rates Fueling Deflation?<\/a><\/h3>\n
\"IntRate-Manipulate\"<\/a><\/div>\n<\/header>\n
\n

Those in power never understand markets. They are very myopic in their view of the world. The assumption that lowering interest rates will \u201cstimulate\u201d the economy has\u00a0<\/span>NEVER<\/strong>\u00a0<\/span>worked, not even once. Nevertheless, they assume they can manipulate society in the Marxist-Keynesian ideal world, but what if they are wrong?<\/p>\n

By lowering interest rates, they\u00a0<\/span>ASSUME<\/strong>\u00a0<\/span>they will encourage people to borrow and thus expand the economy. They fail to comprehend that people will borrow only when they\u00a0<\/span>BELIEVE<\/strong>\u00a0<\/span>there is an opportunity to make money. Additionally, they told people to save for their retirement. Now they want to punish them for doing so by imposing negative interest rates (tax on money) to savings. They do not understand that lowering interest rates, when there is no confidence in the future anyhow, will not encourage people to start businesses and expand the economy. It wipes out\u00a0the\u00a0<\/span>income\u00a0<\/span>of savers and then the only way to make and preserve money becomes\u00a0<\/span>ASSET<\/strong>\u00a0<\/span>investment, as in the stock market \u2014 not creating business\u00a0<\/span>startups.<\/p>\n

So lowering interest rates is\u00a0<\/span>DEFLATIONARY<\/strong>, not inflationary, for it reduces disposable\u00a0<\/span>income. This is particularly true for the elderly who are forced back to work to compete for jobs, which increases youth unemployment.<\/p>\n

Since the only way to make money has become\u00a0<\/span>ASSET INFLATION<\/strong>, they must withdraw money from banks and buy stocks. Now, they are in the hated class of the \u201crich\u201d who are seen as the 1% because they are making money when the wage earner loses money as taxation rises and the economy declines. As taxes rise, machines are replacing workers and shrinking the job market, which only fuels more deflation.\u00a0<\/span>Then you\u00a0have people like Hillary who say they will\u00a0<\/span>DOUBLE<\/strong>\u00a0<\/span>the minimum wage, which will cause companies to replace even more jobs with machines.<\/p>\n

\"Keynes-5\"<\/a><\/p>\n

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

Are Negative Rates Fueling Deflation? Those in power never understand markets. They are very myopic in their view of the world. The assumption that lowering interest rates will \u201cstimulate\u201d the economy has\u00a0NEVER\u00a0worked, not even once. Nevertheless, they assume they can manipulate society in the Marxist-Keynesian ideal world, but what if they are wrong? By lowering […]<\/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":[5496,1619,63,202,426,458,5479,534,536,558,753,783],"class_list":["post-15247","post","type-post","status-publish","format-standard","hentry","category-economics","tag-armstrong-economics","tag-asset-inflation","tag-banks","tag-deflation","tag-inflation","tag-john-maynard-keynes","tag-martin-armstrong","tag-monetary-policy","tag-money","tag-negative-interest-rates","tag-stocks","tag-taxes"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15247","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=15247"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15247\/revisions"}],"predecessor-version":[{"id":15248,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15247\/revisions\/15248"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15247"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15247"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}