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Goldman Asks If Negative Rates Are Coming To The US
While looking at data provided by Eurostat reveals a picture of positive European growth and vibrance, what central banks on the ground are saying is something totally different. And indeed, after yesterday's surprising move by Sweden's Riskbank, there are now at least four central banks, and numerous countries in Europe, that are toiling under NIRP: Sweden (-0.1%), Denmark (-0.75%), the Eurozone (-0.2%) and, of course, Switzerland (-0.75%). Japan, oddly enough, has so far resisted the temptation to join Europe in an all out NIRP-fest, however with the amount of bonds the BOJ is monetizing, which is just about 100% of net JGB issuance, NIRP would be a secondary tool in the BOJ's arsenal especially since Japanese bonds drift in and out of negative interest rate territory on a whim. But what bout the US?
Well, as we first noted a week ago referencing a long-forgotten piece by NY Fed authors titled appropriately enough "If Interest Rates Go Negative . . . Or, Be Careful What You Wish For." As could be expected at the time, the Fed was full of fire and brimstone warnings about the aberations that would occur in a world in which negative rates prevail. It even went so far as saying that "we may see an epochal outburst of socially unproductive—even if individually beneficial—financial innovation."
Well, the financial innovation has yet to come, but Europe is doing all it can to accelerate its arrival.
However, now that Europe has demonstrated that one can go NIRP and not crash the system, will the Fed - once its silly obsession with hiking rates in the summer only to launch even more easing and/or QE as the ECB did in 2008 and 2011 - follow suit and join a rising tide of "developed" world central banks in punishing savers for hoarding cash?
In a note released last night titled "Revisiting Negative Interest Rates in the US", Goldman shares its thought on the matter. It goes without saying that Goldman is important, because whatever Goldman's econ team shares with Goldman's Bill Dudley over at the NY Fed, usually tends to become official policy with a 3-6 month lag.
Revisiting Negative Interest Rates in the US
Central banks in Europe have pushed short-term interest rates further into negative territory recently. Today, the Swedish Riksbank cut its repo rate to -0.1%. The Danish central bank—an early pioneer in negative short-term interest rates—moved its deposit rate down to -0.75% last week. The Swiss National Bank pushed deposit rates into slightly negative territory after it abandoned its currency peg to the euro in December, and has since moved the target range for 3-month Swiss franc LIBOR to -1.25% to -0.25%. The European Central Bank has been holding its deposit facility rate at -0.2% since September. These developments have raised investors’ interest in the feasibility of negative interest rates in the United States, however remote the possibility.
Would the Fed adopt negative interest rates?
We think it is unlikely that the Fed would want to implement negative interest rates in the US. Most importantly, Fed officials have continued to suggest that rate hikes are likely to start in mid-2015, and pushing interest rates into negative territory would of course be moving away from rather than toward rate hikes. (Our forecast for the first hike remains September 2015.) However unexpected negative shocks could always occur. Even then, we think the Fed would be more likely to effect any dovish shift in its policy stance through forward guidance (whether formal or informal) or balance sheet policy, rather than a move toward negative interest rates.
The question of whether the Fed should cut the interest paid on excess reserves (IOER)—which has stood at 25 basis points since December 2008—has come up a number of times in recent years. Usually the question has been posed in terms of whether IOER should be cut to zero, rather than cut to a negative rate, although the fundamental issues are similar in either case. As we have written in the past, we think the Fed is fairly confident that the benefits of cutting IOER would be small, but the costs are highly uncertain. As a result, they have taken a risk management approach and pursued other ways to ease policy after reaching the zero lower bound.
In Janet Yellen’s first semiannual monetary policy testimony as Chair last year, she said that cutting IOER to zero could potentially “completely disrupt money market activities,” while Chairman Bernanke in 2010 noted that if rates went to zero, money markets might not “continue to function in a reasonable way.” The two key concerns here are probably: (1) the operation of the fed funds market and (2) the impact on money market mutual funds.
Regarding the fed funds market, the Fed has reaffirmed that it will continue using the effective fed funds rate as its policy target in the future, and as such would probably be reluctant to do anything to further dry up already thin activity in the market. Against this concern, one might argue that EONIA trading volume—the Euro area equivalent of the effective fed funds rate—did not drop sharply after the ECB instituted slightly negative interest rates in September. However, trading in central bank deposits has a somewhat different character between the US and the Euro area. Much of the volume in the fed funds market is motivated by institutions eligible to earn IOER (banks) borrowing excess liquidity from those ineligible to earn IOER (non-banks). As a result, cutting IOER could be expected to significantly reduce market activity. In contrast, EONIA already only covers bank-to-bank transactions.
Money market funds are probably the more important issue from the Fed's perspective. The US money fund industry is different from its European counterpart for a number of reasons. First, money market funds are larger and play a more important role in financial intermediation in the US than they do in Europe, which has a more bank-centric financial system (Exhibit 1). Second, US money funds are less likely to be backstopped by a more diversified bank sponsor than are European funds. Third, US money funds maintain a stable net asset value (NAV) while European money funds maintain a floating NAV (although last year's SEC money market reforms are moving prime institutional funds to floating NAV). Some observers have argued that the stable NAV misleads investors into believing that money fund investments are riskless, and as a result, might make funds more susceptible to runs in the event of losses. For these reasons, the Fed might be worried about creating a situation where the US money fund industry suddenly finds it increasingly difficult to profitably exist in its current form, and results in a potentially disruptive reconfiguration of the current financial plumbing.
Exhibit 1. Money Funds Are Bigger in the US
Finally, there are significant "systems issues" that would need to be overcome if the Fed were to push short-term interest rates into negative territory. Treasury bills can currently only be auctioned at a discount or at par value, not at a premium. In addition, the minimum coupon on a Treasury note or bond is 1/8%, and negative yield bidding is not allowed for nominal securities. While if push came to shove we believe these issues could be overcome, just as they were with "Y2K" for instance, the implementation cost could be substantial and there could be scope for unwelcome surprises.
So assume the Fed takes the hint, and after one more year of failing to stimulate benign inflation, it decides to take the nuclear option, "how negative could short-term rates go"? Again, Goldman's take:
Even if they do pierce the zero "lower bound" (ZLB), there is a natural limit on how negative short-term rates can go. Banks have the option to convert central bank reserves to physical currency, and depositors have the option to take their deposits out of banks in the form of physical currency. If savers are penalized with negative interest rates, they will eventually prefer to hold currency. Indeed, demand for physical currency in the economy is generally accepted to be related to the level of interest rates even in more normal times. Once the Fed cut interest rates to near-zero currency in circulation grew significantly faster than its pre-crisis trend (Exhibit 2 left panel). On a more micro level, a study from Boston Fed authors Briglevics and Schuh (2013) found that the demand for cash "held in wallet" by consumers (specifically those without credit card debt) was both interest rate sensitive and nonlinear (Exhibit 2 right panel). As rates fall to zero, cash held in consumers' wallets increases at a disproportionate rate. And cash held in wallet is normally only a small share of currency held by households. In fact, most of the increase in currency outstanding in recent years has occurred in $100 bills, which are less likely to be used for day-to-day transactions.
Exhibit 2. Cash Holdings Are Rate-Sensitive
But the cost of holding cash is not zero either. As our European team has analyzed in the past, there is an implicit negative "cash yield" due to the cost of safety deposit boxes (in the case of individuals), secure warehouses or vaults (in the case of institutions), insurance, etc. for physical currency holdings. Because of this, there is no reason why short-term interest rates cannot be slightly negative, especially if negative rates are assumed to be temporary. Perhaps this is why ECB President Draghi described -20 basis points as the "effective lower bound" on its policy rate, and indicated that rates "cannot be adjusted down further" (although SNB and the Danish central bank maintain more deeply negative policy rates).
Actually, that does not explain why both the SNB and the Danish Central Bank are toying with the idea of NIRP going to -1% or lower next. The only question is when does the Fed join the deliberations.
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Of course the possiblity exists. It Currency War Time People.
There's no IF only a WHEN
I think they should have negative rates for AAPL shareholders.
Hi Ho Silver, away! Silver just went vertical. Imagine that, a currency with no counter-party risk.
I have negative interest in Apple already.
Yes, currency war, but equally if not more important, it keeps allowing the Capital Class to continue minting money *without* taking risk. Risk is defined here as hiring people, building facilities, etc. etc. Financial engineering is continued is the outcome here and the Capital Class makes moar $ without lifting a finger. Politicians get *paid* by them for inaction and all is good. Remember that this policy masks all the worlds troubles by not allowing market prices to sound the alarm, so to speak. But by the sheer fact the need to keep going into NIRP is proof positive it is all folly and much worse, a tremendous waste of time and people's lives.
Freudian slip that the article called Sweden's central bank "Riskbank" instead of "Riksbank"?
Or simple typo?
Negative Rates by the Fed = Death of USD as world currency = Martial Court for the whole FOMC
Not gonna happen, ever.
wrong
Try paying US Military worldwide with paychecks which will lose value.
Just give it a try
took out $1500 bucks from my bank this week..the teller gave me the eye, and said "what do you need this money for"?..well i lied and said my wife buys stuff..what i was thinking why leave it in the bank for 0.01% when inflation is 100x that..but then that would just screw up the report to the IRS of structuring that she was getting ready to do..seems I am taking my own money out of her bank at unacceptable rates..be warned.
Did they ask you were you got it when you put it in? Cart, horse, nailgun?
neg no they did not as my co allows only dir deposit..I keep $200 in a savings acc and drain my checking to cover only outstanding checks..seems the bank is not happy with me, in the end I am a criminal for even having money..this will not end well if IRS gets on me, but shit I am a happy tax payer in that I have income to tax. we are all so fucked but only a few know it, more will.
for those who do not know what structuring laws mean;
"Pressured by Congress, the IRS said Wednesday it is changing its policies and apologizing for seizing banks accounts from otherwise law-abiding business owners simply because they structured bank transactions to avoid federal reporting requirements.
Their alleged crime: Routinely making bank deposits of less than $10,000, which allowed the business owners to avoid reporting requirements designed to catch drug dealers and money launderers."
Oh, your still trading fiat money, yeah that is a world of hurt.
I'm usually a very polite guy, but if my bank teller would have the nerve to ask me what I'm planning to do with my own money, I wouldn't even bother to lie, he would get a cool "that's none of your business now, is it?".
I'd make certain he wouldn't ask twice.
I have actually closed an account over a nosy teller. I said that if I was going to get interrogated over using my own money in whatever way I wanted, just give me all the cash and I'll find a place that minds its own business. The bank manager came and apologized, but I still dropped the account.
We also have an account at the Bank of Serta. The underground economy rules.
ABsolutely. If money in the bank loses value, then underground economy flourishes.
I have been saying (and participating) in this since 2008. Black market is booming. All kinds of people bartering and I even had some new sewer lines run by a plumber, paid for it with physical silver. All under the table and out of the eye of the tax man. Fuck em. If the cronies don't pay taxes, neither will we.
Greece is simply a few years ahead of everybody else.
The US gov't doesn't care that you are avoiding taxes. They estimate tax avoidance and run massive deficits to account for all the fraud (basically spending as though they had recieved the tax receipts). So you aren't really doing much to hurt the gov't...you just have more money to spend than the people that do pay their taxes. God help us if our country becomes as crooked as Greece.
Mr. Polite, it is very important that you tell said teller to simply fuck off.
They will avoid you from hence forth.
Those that are not moving cash out of banks are totally retarded. Your ancestors knew to drain every account into coffee cans in the back yard - only now it's pvc.
I have been asked it so much that it is obvious that it is part of their procedure.
These are tellers, not NSA agents. They are just working stiffs trying to make it through the day....
Make up an answer and move along.
Homeland Security, FBI, IRS etc go to the banks and instruct them to ask these questions. I wouldn't blame them. They are just trying to feed their families. Blame congress and the bureaucrazy.
The higher up brass would get equal value but the soldier would get 3 hots and a cot. You know what EKM, they will take it and like it because they are good little sheep.
Yeah, just cut um loose and see if they can find work over there, just watch um try to get a job.
Rome already did it (and it will likely happen here too) so guess what happens after that..............they start sacking their own country to make up the difference.
Goldman knows NIRP is coming, that's why they are floating trial baloons to see what the reaction will be.
Nope. Goldman will vanish if nirp comes.
the "military" in those countries didn't accept it and made it not happen?
this is a tax on the rich, on the institutionals. better than defaults, in their idiotic view.
because they'll go home and find other jobs?
It is basicly the same thing as handing the government an unrestrained printing press. The Fed paying the US gov interest to loan it money. It will probably happen. It will be a nice misdirection for the financial illiterates on Wall Street and TV to fool themselves into thinking some great financial innovation is taking place. But it is just Weimar. This all ends one way only. No matter what is on the FOREX tickers, there is a real world out there where cheeseburgers in Switzerland cost $45 USD and the gold vaults are being emptied.
Aces
People with lots of money will pay for the security of storing their money in the safest place. If you are wealthy and have many millions or billions, or if you are a corporate treasurer in charge of safeguarding and investing the corporate short term liquid assets, you can't exactly go down to your local branch and withdraw a few 100 million or billion dollars. They only way to move the assets is electronically. If you percieve that your options are: a: invest in a riskier asset, or b: play it safe and pay a fee, you may very well allocate some of your assets to the fee category.
What negative rates also tells you is that people are getting fearful about getting their money back, or getting a haircut. If you think that your country might have a "one-time" Cyprus haircut on bank balances, perhaps you can dodge that bullet by buying safe government bonds in some country that is not likely to default. You wouldn't buy Argentinian bonds, but you might buy Swiss bonds.
It's also an indication about how thoroughly the central bankers have distorted the financial landscape. There is no legitimate price discovery anymore.
The life and death of the USD as world reserve currency, hasmore to do with the military, than finance or economics...
So long as U.S. Navy contols the shipping lanes, IT decides what is reserve currency..
Of course, you'll read (true) stories of erosion on the margin, but that is just on the margin, so long as above fact persists..
Correct. Force is always ulitmately behind any fiat currency.
How can you possibly come to that conclusion. They are only a few bips from negative rates right now. It's going to happen and you can mark it down. As insane as it is it will come to that inevitably.
It is hard to believe people still take this financial system seriously. This is like the superbowl of Monopoly. But when the game is over, it will be over.
I've always thought the Super Bowl just ending was always weird. How it's just over. All That work. Anticipation. And then just over.
Kind of like life. All that work and dedication with eating healthy, staying fit, and loyalty to slave owners...lol - still fucking die. Everything always goes back in the box rather a board game or corpse when it is over.
You sure you're not thinking of "The Sopranos" finale......? :O)
If they don't drop bombs. They drop rates to NIRP.
A stack of PM does'nt cost any more to hold no matter what the rate
Not true.. I'm a buyer, but there is always opportunity cost' to consider..
What is the opportunity cost? The ponzi stock market? ZIRP bonds, CD's and saving accounts?
bail ins- what ever form they take do not worry CNBC BLOOMBERG will call it something else..oh and there will be bail ins..the sheep will be bled dry is gauranteed.
Negative rates....manna to banksters! Look how well things are going in Europe now that they have negative rates, just 'blew it out of the water' with most excellent .06 GDP! Happy times comin folks, just grab a grilled cheese and relax!
More like a "wish sandwich!"
"A wish sandwich is the kind of a sandwich where you have two slices of bread, and 'wish' you had some meat!"
The dollar adjusted for inflation has only another 5% so...RAMMING SPEED MR. YELLEN.
Seriously, who in their right mind would want to deposit their monies in a bank offering negative rates???
large money managers.... not individuals. Those douches that are responsible for managing state pension funds, etc.... they've got to put money somewhere. and we're talking about a variety of NIRP's here, right? Not just savings accounts, but bonds. Those bonds are used as a liquidity tool for these money managing a-holes.
ask yourself, what is the point of NIRP? We're in a precarious position. with all this debt, the Central banks are worried about deflation. They're worried about stalling economies. They've got to do their damnedest to create inflation, otherwise, their debt driven economy collapses, and their banking butt buddies go belly up. this is about the survival of the banks and the fiat. NIRPing is a way for the banks to skim more money, and write off bad debt.
but, fuck em. if my local bank charges me to keep money there, i'm pulling it all out. each pay check will be immediately converted to cash. there's no way im' going to be the last guy in line for the bank runs.
FUCK YOU MONEY CHANGERS!
Good luck to those state pension fund managers who are looking for 8% annual returns to keep making scheduled payouts.
NIRP is an overcompensation just like massive interest rate hikes were back when we fought inflation at the end of the 70's.........both efforts were destined to fail because markets are only efficient without interference.
Remember the famous saying "I'm not so concerned about the return on my capital as I am the return of my capital" becuase it's never been more true.
In most cases real interest rates have been negative for years, try find any cash account that beats inflation. Sheeple, like fund managers, just can't see a better alternative.
COYH
You just made me realize that there are a lot of people out there in their wrong minds.
Where I bank, the effective, real rate is already negative. Isn't that the case for most people?
We pay $ 20.00 per month for the privilege of not having $20,000 on deposit.
As soon as the current project winds up they will have the privilege of none of our money.
Nope, guess again.
You had to start it in italics so I couldn't give you a +1. Anyway, +1.
If the banksters can't make money from large wars and destruction they'll start taking it directly.
Watch out they'll start locking withdrawals soon.
I still dont see why people just wouldn't pull their money from the banks. The article mentions the cost of vaults, and insurance as discouraging people from going that route but it doesnt seem to add up to me. If you have 100k in the bank at -1% interest you lose 1k per year.....you can buy a good safe for 500 dollars.
would you open that good safe if a robber has a shotgun to your daughter's head?
So 100% chance of loss of the thousand bucks compared to a 1/1000000 chance of a robbery by a person who most ZH'rs would have dropped within the first 10 seconds of illegal entry.....
Safe.
Dumb ass would need to realize...don't fuck with the guy who stores cash in his gun vault. One of those guns in the vault just might be loaded. Or maybe it isn't just one.
And he would have been dropped much earlier, probably by my wife but maybe by me. She gave birth to that girl. I watched those nine months culminating in pushing out a baby. Although she has done it six times, she still values each child just like I do. Do NOT fuck with a Mama Bear. She can be meaner than Papa about her babies.
I like your answer. When the bank steals your money, what recourse do you have? Over the weekend, the news says Monday will be a bank holiday. You show up Tuesday and see five polite but armed soldiers standing in front of the entrance informing you that you can only withdraw $200.00 a day from your account that had $135,000 in it (CD's, savings, whatever). Hello, you've already been robbed. Just ask the people in Cyprus how that worked out.
I dont know. I'm typically armed, and very well trained. I also know exactly what I'm capable of, and won't hesitate to drop another human if need be. However, I'm not wealthy, and don't project a lifestyle beyond my income. I'm an uniteresting target to most would be thieves. So, if I get a bad guy interested in me, then I just autoimaticaly assume they are there to murder me and my family---so it's on like Donkey Kong.
It depends on which daughter?
Eggs baskets and thieves, gypsy's tramps, well you get the idea, what else you got second time around?
Yeah, but the crane .... you hang it from .... cost $500,000 ?
The only reason I can think of: fear. As long as people believe banks are a safer place to put their money than under their own mattress, then the banks will be the masters.
short-term government bonds of 'credit-worthy" currency issuers = institutional cash
negative rates = admission of zero or negative growth moving forward and implied haircut in value of real assets.
if you agree to this, it goes without saying that it negates the idea that risk assets should be anywhere near where they are today.
on a side note, italian 30yr yield now lower than US 30yr yield. lunacy.
Negative interest rates around the world and gold still can't get a bid - the primary reason the bears say not to buy gold is that it doesn't pay interest. Well, not paying any interest is better than negative interest but gold is still shunned. Time for a plan B.
stateside
Gold is fer spendin, not saving.
PMs are wealth insurance, not just currency.
I saw the Wolf of Wall Street last night .... DiCaprio, Rob Reiner and a cast of thousands .... 3 hours of NIRP (Negative Interest Randy Production) !
I can't wait to refinance my mortgages at a negative rate!
You can just bid down the price of the house and chaulk it up to interest.
Goldman Asks!
Since when?
We think that started sometime in 1913, not sure where it ends but it feels like soon.
WTFUD asks, When will Goldman be put on the list of Terrorist Organisations?
1/2 those guys make the list so if yee aint on the inside, your vote won't count.
If debt is an asset why not go to a NIRP, and while they're at it let's start with negative mortgage rate. I'll buy a $200,000 and only payback $195,000. Not only that I'll say that the house, at a future date should fetch $300,000, and presto changeo, my equity in the house jumps to $105,000. Next I go borrow 125% of the homes equity or $130,000 go payoff 2/3 of the first loan and do it all over again. I'm thinking within a years time I'll have a free home and a cool $1,000,000, or am I thinking to small.
The #'s are large, the idea, not so much.
Well I was just thinking since "mark to market" is gone why not? You're probably right though only the big banks should be allowed to "mark to fantasy".
Them banksters are starting to look like heroin junkies that have beeen using for 10 years begging for just "one mo fix"...
Holy fuck it's all getting real crazy. And i been saying that 4 years haha.
I've been saying it that long as well, exactly the reason my wife won't believe half of what I tell her anymore.
I keep trying to think of the Fed as the "control system" for our Medium of Exchange (MOE).
A shower is an example of a feedback control system. I keep trying to characterize what the Fed is doing by comparing it to a shower with one or more of the following problems.
There are many more possibilities but you get the idea.
I'm thinkin of the one underdesigned sewer system, where the water collects as you stand under a dripping shower.
This is great however your thought process is still too logical to be compared with Fed Think. To think like the Fed you have to go batshit crazy. For example using your shower analogy, the Fed would simply declare water a barbarous relic. The Fed would then replace water with paper confetti and they would declare "dirty" as the new "clean". At the same time The Fed would collect and store the water reserves of other sovereign nations. And later when those sovereign nations seek to repatriate their water reserves...
Basically what this NIRP is doing is telling the world that increased economic activity is the bane of current society.
Which is not entirely untrue given peak energy, peak pollution and general run down state of the planet with 8 billion to feed.
This century will be one of reset and pain. Like the 14th.
Until we find a new energy paradigm along with a new monetary one.
And once we move away from the planned obsolescence cancer of MIC investments and resulting planetary mayhem to keep the war machine flourishing.
Money has a cost. This is a natural law. You can pretend that money is free (or negative cost, lol) for awhile, but eventually there will be blowback. And it will be violent...
I can understand the loaning of money at interest has a cost in that more money must be "created" (made available for use) over time. But the simple existence of money? A little further explanation is needed to define "cost", and "blowback". Please.
Goldman doesn't ask, they tell.
It is "almost" unbelievable to think that negative interest rates are becoming the tool of choice to discourage people from saving and essentially FORCE them to spend.
If an economy is doing so well, why would such "forced spending" be necessary?
Color me confused. If you're going to CHARGE ME to use MY money, and MY money is "insured" by the FDIC, why on God's Green Earth would I put MY mony in YOUR bank.
Even more, if I am considered an UNINSURED CREDITOR of YOUR bank, so strike the middle statement of my first sentence, and why if YOU "lose" MY money, should I not seek reparations that involve judging you by Rule .308?
see my above post...
Why do you have money in the bank?
I guess old people and women want safety?
There's not much of an incentive to work anymore. The elites won't be happy until they own everything. First, you lose your ass on your earned money via inflation. And forget what the goverment says the inflation rate is. Check Shadowstats.com for some more reliable numbers. Now this negative interest is merely an adder to inflation, except you are losing the money to the people you trust to hold it for you: the banks. But wait... we don't trust the banks anymore, do we? People will wake up to gold as soon as they understand that what they've been told is money all their lives is just a piece of paper that was designed to take everything away from them that they ever earned or worked for and ever will. Paper money can be used as the vehicle for you to lose everything you have, until the paper you hold in your hand is totally worthless. Not so with gold.
Starve the BEAST, it has horns and a goats head, FUCK THEM!
https://www.youtube.com/watch?v=DyaitC91hEM
https://www.youtube.com/watch?v=M_3T-Af57Pg
https://www.youtube.com/watch?v=rK0De210TBQ
I know I am repeating myself, just a bit of humor, we could all use a laugh or three?
Preach it, Brah!
All I read on MSM is rate hikes in June, what a bunch of crap! We will be in NIRP and moar FQE before that happens.
On a postive note, there will be moar and moar people waking up to the fact that the globe is in dire trouble.
I just heard today, that a farmer making cash deposits from selling his cream, had his money confiscated by the Fed, for structuring money...he had to pay to get his OWN money back. Also, a gun dealer had $900,000 seized by the Fed as well for the same reasons, and facing a felony count, had to spend over $100,000 in fees to get it back.
This is no longer America, this is a fascist regime in control, making our lives miserable!
What the hell do we do about it? This is OUT OF CONTROL...FUCK THE FEDERALIES anymore!
I am think of doing an Obama all in....run up every credit card, take out every loan possible and then tell'em. Sorry I don't feel like paying it back. Sell my house and more to some nice beach out of the country.
Anyone that keeps money in the bank deserves to get fucked. Its my understanding that deposits represent an unsecured loan to the bank. Backed up to a point by FDIC that would become insolvent within the first 15 seconds of a bank run. Add IRS siezure powers. WTF. Your money would be just as safe in the possession of a convicted thief.
If you measure inflation properly then you would conclude we've had negative rates for many years.
The only way that the neo Bolsheviks can finance the massive illegal immigration into the US is with ZIRP and now NIRP. Otherwise people will revolt. I think that they are goig to revolt at some stage anyway... and apparently so do the neo Bolsheviks running the Fed Gov't. Otherwose why would l9ocal police dep[ts be getting Iraq war type armaments?
Riddle me that feckin' Goldman.
I have posted this many times before, but this is worth posting again, for this is straight from Mr. Yellen:
http://www.reuters.com/article/2010/02/22/usa-fed-yellen-idUSN2222725320...
The outcome should be quite clear.