{"id":46318,"date":"2019-05-23T14:57:03","date_gmt":"2019-05-23T19:57:03","guid":{"rendered":"https:\/\/olduvai.ca\/?p=46318"},"modified":"2019-05-23T15:03:38","modified_gmt":"2019-05-23T20:03:38","slug":"the-terrifying-truth-about-negative-interest-rates","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=46318","title":{"rendered":"The Terrifying Truth About Negative Interest Rates"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.dollarcollapse.com\/negative-interest-rates-terrifying-truth\/\">The Terrifying Truth About Negative Interest Rates<\/a><\/h3>\n\n\n\n<p>Pushing interest rates below zero is both an act of desperation and something that in theory should have a huge, immediate impact of the behavior of borrowers and savers. The fact that negative rates have become the new normal in big parts of the world but haven\u2019t caused the expected behavior change should scare the hell out of everyone.&nbsp;<\/p>\n\n\n\n<p>To understand why this is so, think of the rate of interest as the price of money. It\u2019s what an individual or business has to pay to get credit with which to buy and invest. As with anything else, when the price of money is high, we tend to acquire less of it and when the price is low we acquire more. So making money not just cheap, not just free, but actually&nbsp;<em>profitable<\/em>&nbsp;to borrow, while making savings unprofitable to hold should, according to conventional Keynesian economics, create a scene in the credit markets reminiscent of those Black Friday Wal-Mart videos where fistfights break out over the last remaining Barbie Doll. Businesses in particular should be borrowing and investing like crazy, igniting an epic capital spending boom.&nbsp;<\/p>\n\n\n\n<p>But that hasn\u2019t happened. In Europe, for instance, negative rates have been in place for five years \u2026<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.dollarcollapse.com\/wp-content\/uploads\/2019\/05\/Negative-interest-rates-europe-May-19.jpg\" alt=\"negative interest rates Europe\" class=\"wp-image-24968\"\/><\/figure><\/div>\n\n\n\n<p>\u2026 and instead of a rip-roaring post-Great Recession recovery, the result has been the kind of anemic growth that conventional economics would predict for a tight-money environment. Business capital spending, the engine that in theory should be propelling Europe\u2019s economy, looks like the opposite of a boom.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.dollarcollapse.com\/wp-content\/uploads\/2019\/05\/Europe-capital-spending-May-19.jpg\" alt=\"Europe capital spending negative interest rates\" class=\"wp-image-24969\"\/><\/figure><\/div>\n\n\n\n<p>This translates into seriously boring GDP growth:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/www.dollarcollapse.com\/wp-content\/uploads\/2019\/05\/Europe-GDP-grwoth-May-19.jpg\" alt=\"Europe negative interest rates Europe\" class=\"wp-image-24970\"\/><\/figure><\/div>\n\n\n\n<p>&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Terrifying Truth About Negative Interest Rates Pushing interest rates below zero is both an act of desperation and something that in theory should have a huge, immediate impact of the behavior of borrowers and savers. The fact that negative rates have become the new normal in big parts of the world but haven\u2019t caused [&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":[195,213,7544,558],"class_list":["post-46318","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-dollar-collapse","tag-john-rubino","tag-negative-interest-rates"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46318","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=46318"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46318\/revisions"}],"predecessor-version":[{"id":46319,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/46318\/revisions\/46319"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=46318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=46318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=46318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}