{"id":17126,"date":"2016-01-30T11:58:01","date_gmt":"2016-01-30T16:58:01","guid":{"rendered":"http:\/\/olduvai.ca\/?p=17126"},"modified":"2016-01-30T11:58:01","modified_gmt":"2016-01-30T16:58:01","slug":"negative-interest-rates-show-desperation-of-central-banks","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=17126","title":{"rendered":"Negative Interest Rates Show Desperation of Central Banks"},"content":{"rendered":"

Negative Interest Rates Show Desperation of Central Banks<\/a><\/h3>\n
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\"\"Image:\u00a0MarketWatch<\/a><\/em><\/p>\n

Japan has joined the EU, Denmark, Switzerland and Sweden in imposing negative interest rates.<\/p>\n

Indeed,\u00a0more than a fifth of the world’s GDP\u00a0<\/a>is now covered by a central bank with negative interest rates.<\/p>\n

The Wall Street Journal\u00a0notes<\/a>:<\/p>\n

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TOKYO\u2014Japan\u2019s central bank stunned the markets Friday by setting the country\u2019s first negative interest rates, in a\u00a0desperate<\/strong>\u00a0attempt to keep the economy from sliding back into the stagnation that has dogged it for much of the last two decades.<\/div>\n<\/blockquote>\n

BBC\u00a0writes<\/a>:<\/p>\n

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The country is\u00a0desperate<\/strong>\u00a0to increase spending and investment.<\/div>\n

***<\/p>\n

Japan has been\u00a0desperate<\/strong>\u00a0to boost consumer spending for years. At one point it even issued shopping vouchers to stimulate demand.<\/p><\/blockquote>\n

The New York Times\u00a0writes<\/a>:<\/p>\n

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Moving to negative rates reflects a measure of\u00a0desperation<\/strong>\u00a0on the part of central banks.\u00a0Their traditional tools have been largely exhausted, as most countries\u2019 interest rates have been pushed to almost nothing<\/strong>.<\/div>\n<\/blockquote>\n

MarketWatch\u2019s senior markets writer, William Watts,\u00a0notes<\/a>:<\/p>\n

This might not be the sort of capitulation stock-market investors were anticipating.<\/p>\n

The Bank of Japan\u2019s surprise decision Friday to start charging depositors for parking excess reserves at the central bank triggered a global equity rally. But several monetary policy watchers and market strategists worried that the move was an acknowledgment that\u00a0the world\u2019s central banks are running out of ammunition in the battle against deflation<\/strong>.<\/p>\n

\u201cThis is an interesting move that looks a lot more like\u00a0desperation<\/strong>\u00a0or novelty than it looks like a program meant to make a real difference,\u201d said Robert Brusca, chief economist at FAO Economics.<\/p>\n

Kit Juckes, global macro strategist at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale, underlined the moment in a note to clients:<\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Negative Interest Rates Show Desperation of Central Banks Image:\u00a0MarketWatch Japan has joined the EU, Denmark, Switzerland and Sweden in imposing negative interest rates. Indeed,\u00a0more than a fifth of the world’s GDP\u00a0is now covered by a central bank with negative interest rates. The Wall Street Journal\u00a0notes: TOKYO\u2014Japan\u2019s central bank stunned the markets Friday by setting the […]<\/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":[57,124,11328,359,452,6040,534,1921,775,861,5510],"class_list":["post-17126","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-central-banks","tag-excess-reserves","tag-germany","tag-japan","tag-main-street","tag-monetary-policy","tag-new-york-times","tag-switzerland","tag-wall-street-journal","tag-washingtons-blog"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17126","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=17126"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17126\/revisions"}],"predecessor-version":[{"id":17127,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17126\/revisions\/17127"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}