{"id":18768,"date":"2016-03-11T21:42:17","date_gmt":"2016-03-12T02:42:17","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18768"},"modified":"2016-03-11T21:42:17","modified_gmt":"2016-03-12T02:42:17","slug":"why-negative-rates-cant-stop-the-coming-depression","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18768","title":{"rendered":"Why Negative Rates Can\u2019t Stop the Coming Depression"},"content":{"rendered":"<h3><a href=\"http:\/\/www.internationalman.com\/articles\/why-negative-rates-cant-stop-the-coming-depression\" target=\"_blank\">Why Negative Rates Can\u2019t Stop the Coming Depression<\/a><\/h3>\n<p class=\"by-line\"><img decoding=\"async\" src=\"https:\/\/d24g2nq85gnwal.cloudfront.net\/images\/authors\/negative_interest1.jpg\" alt=\"Why Negative Rates Can\u2019t Stop the Coming Depression\" \/><\/p>\n<p>&nbsp;<\/p>\n<div id=\"article-body\" class=\"margin_top_25\">\n<p><em>A bird in the hand is worth two in the bush.<\/em><\/p>\n<p align=\"right\">\u2013 Anonymous.<\/p>\n<p>In our upcoming issue of\u00a0<em>The Bill Bonner Letter<\/em>, we explore the strange territory of \u201cNIRP\u201d \u2013 negative-interest-rate policy.<\/p>\n<p>About $7 trillion of sovereign bonds now yield less than nothing. Lenders give their money to governments\u2026who swear up and down, no fingers crossed, that they\u2019ll give them back less money sometime in the future.<\/p>\n<p>Is that weird or what?<\/p>\n<p><strong>Into the Unknown<\/strong><\/p>\n<p>At least one reader didn\u2019t think it was so odd.<\/p>\n<p>\u201cYou pay someone to store your boat or even to park your car,\u201d he declared.<\/p>\n<p>\u201cWhy not pay someone to look out for your money?\u201d<\/p>\n<p>Ah\u2026we thought he had a point. But then, we realized that the borrower isn\u2019t looking out for your money; he\u2019s taking it\u2026and using it as he sees fit.<\/p>\n<p>It is as though you gave a valet the keys to your car. Then he drove it to Vegas or sold it on eBay.<\/p>\n<p>A borrower takes your money and uses it. He doesn\u2019t just store it for you; that is what safe deposit boxes are for.<\/p>\n<p>When you deposit your money in a bank, it\u2019s the same thing. You are making a loan to the bank. The bank doesn\u2019t store your money in a safe on your behalf; it uses it to balance its books.<\/p>\n<p>If something goes wrong and you want your money back, you can just get in line behind the other creditors.<\/p>\n<p>The future is always unknown. The bird in the bush could fly away. Or someone else could get him.<\/p>\n<p>So, when you lend money, you need a little something to compensate you for the risk that the bird might get away.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Why Negative Rates Can\u2019t Stop the Coming Depression &nbsp; A bird in the hand is worth two in the bush. \u2013 Anonymous. In our upcoming issue of\u00a0The Bill Bonner Letter, we explore the strange territory of \u201cNIRP\u201d \u2013 negative-interest-rate policy. About $7 trillion of sovereign bonds now yield less than nothing. Lenders give their money [&hellip;]<\/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":[6190,2310,6228,534,558,1389,12887],"class_list":["post-18768","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bill-bonner","tag-depression","tag-international-man","tag-monetary-policy","tag-negative-interest-rates","tag-nirp","tag-sovereign-bonds"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18768","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=18768"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18768\/revisions"}],"predecessor-version":[{"id":18769,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18768\/revisions\/18769"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}