{"id":21554,"date":"2016-09-10T10:04:39","date_gmt":"2016-09-10T15:04:39","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21554"},"modified":"2016-09-10T10:04:39","modified_gmt":"2016-09-10T15:04:39","slug":"there-is-no-such-thing-as-a-negative-interest-rate","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21554","title":{"rendered":"There is no such thing as a negative interest rate"},"content":{"rendered":"

There is no such thing as a negative interest rate<\/a><\/h3>\n
\n
\n

We Austrian economists are used to having terms corrupted, misused and redefined by statists and others who love and advocate strong central control of money and power. The term \u201cinflation\u201d is a prime example. We Austrians refer to \u201cinflation\u201d as creating new fiat money\u2013as in inflation of the money supply. This is in sharp contrast to what we commonly hear in the mainstream media and from all Keynesian influenced economists, who use the term to describe a general increase in prices. Now nearly everyone thinks of inflation in this sense, so much so that we Austrians must always be careful to say \u201cinflation of the money supply<\/em>\u201d whenever we use the term \u201cinflation\u201d.<\/p>\n

Those of us of a libertarian political persuasion, which includes many (but not all) Austrian economists, likewise bristle at how modern statists have hijacked and corrupted the term \u201cliberal\u201d. Liberal is a term that is derived from the word \u201cliberty\u201d. Ludwig von Mises even penned a book titled \u201cLiberalism<\/a>\u201c. Naturally, it contains not one reference to what today\u2019s so-called liberals advocate; i.e., erosion of property rights and statist intervention in almost all aspects of life.<\/p>\n

However, now we Austrian economists are faced with a term that is new. It is NOT a term that has had a prior meaning and has been corrupted and re-defined.. It is a new, made up and wholly fabricated term\u2013 \u201cNegative Interest Rate\u201d.<\/p>\n

Interest is founded on time preference<\/strong><\/p>\n

The rate of interest is founded on an innate trait of the human condition. All other things being equal, humans desire goods and services earlier rather than later. Austrian economists refer to this human trait as \u201ctime preference\u201d. Those who desire things sooner rather than later are said to have a high time preference. Likewise, those who desire things later rather than sooner are said to have a low time preference.<\/p>\n

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

There is no such thing as a negative interest rate We Austrian economists are used to having terms corrupted, misused and redefined by statists and others who love and advocate strong central control of money and power. The term \u201cinflation\u201d is a prime example. We Austrians refer to \u201cinflation\u201d as creating new fiat money\u2013as in […]<\/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":[2125,483,966,8949,536,954,558,1389],"class_list":["post-21554","post","type-post","status-publish","format-standard","hentry","category-economics","tag-austrian-economics","tag-liberty-2","tag-ludwig-von-mises","tag-mises-org","tag-money","tag-money-supply","tag-negative-interest-rates","tag-nirp"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21554","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=21554"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21554\/revisions"}],"predecessor-version":[{"id":21555,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21554\/revisions\/21555"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21554"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21554"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21554"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}