Great Depression of 2016

[hemet dennis]

Interesting reading: http://www.economist.com/blogs/economist-explains/2015/02/economist-explains-15

I bet those Greeks wish they had an old safe stuffed with euros.

Do you think any Greeks put any money in any central banks ?

 

[rufus]

No Dennis, but for a while Greeks were limited in ability to withdraw funds from their own accounts. That made life difficult for a while.

 

[hemet dennis]

No Dennis, but for a while Greeks were limited in ability to withdraw funds from their own accounts. That made life difficult for a while.

So what does that have to do with the link you posted ?

 

[rufus]

Dennis, central bank rates translate into commercial rates at local banks. "Since cash carries an implicit rate of interest of 0%, consumers might well respond to negative rates by withdrawing money from banks and stuffing it in their mattresses. The resulting shortage of loanable funds would push interest rates up (though perhaps not before causing an economy-crushing bank run)."

Go back and reread the article and then think about it.

 

[hemet dennis]

Dennis, central bank rates translate into commercial rates at local banks. "Since cash carries an implicit rate of interest of 0%, consumers might well respond to negative rates by withdrawing money from banks and stuffing it in their mattresses. The resulting shortage of loanable funds would push interest rates up (though perhaps not before causing an economy-crushing bank run)."

Go back and reread the article and then think about it.

Commercial banks don't have negative rates.

 

[rufus]

Well, Dennis now it seems they do. The import of the article is that depositors will withdraw their funds when they realize they are getting negative interest.

I sure wouldn't leave my money in a bank that is going to charge me for keeping it there.

 

[hemet dennis]

Well, Dennis now it seems they do. The import of the article is that depositors will withdraw their funds when they realize they are getting negative interest.

I sure wouldn't leave my money in a bank that is going to charge me for keeping it there.

No ! No commercial bank has negative interest rates !

Deal in facts and the truth is easier to see.

 

[MrsBrooke]

http://www.bloombergview.com/quicktake/negative-interest-rates

Negative interest rates could *never* happen here. There are "checks and balances."

MrsB

 

[rufus]

Sometimes someone's facts are just seen as someone else's opinions. Just saying it so, does not make it so.

The object of this thread is to discuss ideas about how to deal with upcoming financial problems. There are no all inclusive answers. For some, it is best to pay off their debts and become self sufficient. Some think investing in metals is the way to go. For others, it is gardening, canning, and food storage. There is no one strategy for all of us. All of our situations are different.

We need to observe what is happening in the world and assess just how it will affect us personally.

Some of us are unable to comprehend the gravity of the situation. I think the term is "cognitive dissonance." When a black swan event occurs, they are unable to ascertain the cause and the effect of the situation. They then resort to blaming others. It must be someone else's fault.

We need to keep an open mind and examine all ideas offered. Sniping at others is not productive.

 

[rufus]

Well, today promises to be interesting. It looks like things are going downhill in trading. Perhaps later in the day, bargain hunters will begin to buy in.