Stanley Fischer's Bizarre Justification For Negative Rates

Tyler Durden's picture

With over $13 trillion in global bond yields trading in negative territory as a result of central banks' negative rates policies, leading bank profits to tumble and forcing savers in both Japan and now Germany to pull their money out banks and put into safe deposit boxes in their homes, there is little doubt that NIRP has been a failure: even such establishment financial outlets as the WSJ admit as much. Which is why when listening to today's Stanley Fischer interview on Bloomberg TV with Tom Keene, one particular section caught our attention, namely the Fed Vice Chairman's attempt to justify negative rates and how, despite all the evidence to the contrary, "negative rates seem to work in today's world."

We found the following exchange fascinating:

KEENE: What did you learn about negative rates in the crucible of the markets? What have you learned in the last number of months?

 

FISCHER: Well, we’ve learned that the central banks which are implementing them -- there were four or five of them -- basically think they’re quite successful and are staying with their approach, possibly with the exception of Japan. They’re thinking it through and they have said they’ll come back to try and make negative rates work better. So we’re in a world where they seem to work. I think one of the most interesting developments I’ve seen in theory is a paper that says, yes, they work up to a certain point and then they become counterproductive.

 

KEENE: Precisely. Yes, that’s a critical point. I mean we have within the interviews of Bloomberg Surveillance that Francine Lacqua and I have had Olivier Blanchard calls them an outright scam. Granted, he’s not a public official anymore, I understand that. There is a raging debate about the efficacy of negative interest rates for central banks, for governments, and again for banking itself. What about the efficacy of negative rates for savers and the people of these different nations?

To which, Fischer's answer was frankly shocking:

FISCHER: Well, clearly there are different responses to negative rates. If you’re a saver, they’re very difficult to deal with and to accept, although typically they go along with quite decent equity prices. But we consider all that and we have to make trade-offs in economics all the time and the idea is the lower the interest rate the better it is for investors.

And there you have it: ignore the economy, it's all about "decent equity prices" and whatever is "better for investors." We point this bizarre justification for the central banks' latest failure, just in case there was still any confusion why they keep pushing the same failed policies day after day: it's all about keeping stocks artificially inflated.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
MFL8240's picture

The moneychangers!  We do not believe anything they say!

back to basics's picture

No, actually I believe him in this case. He just told you he doesn't give a shit about you and your diminishing savings as long as those who own stocks see their stock prices continue to climb higher.

 

 

remain calm's picture

Stanley why don't you text with Weiner. He and you are the same, big dicks who are fucking losers

pods's picture

Another Dually telling us how it should be.

Just perfect.

An Ann Coulter quote comes to mind.............

pods

J S Bach's picture

"If you’re a saver, they’re very difficult to deal with and to accept."

Save shmave.  Who "saves" anymore.  Most people nowadays have never even heard of the word.  Hey, man... we're in the decadent-live-for-today 21st Century.  Eat, drink and be merry, for tomorrow we die.

mtl4's picture

If this comment from Fischer is representative of the current thinking within the FED this this is precisely going to be their downfall in the years to come.  The problem is that lower rates are good for stocks up to the point where the market becomes overheated and once that happens they simply can't hike rates fast enough to slow it down.  Then you also have the compounding problem of the interest on massive amounts of debt to deal with, not a pretty picture at all.

tc06rtw's picture

   
 It all boils down to an extremely simple dogma
(which they are smart enough not to state explicitly):
   
 There are many, many people who require your wealth far more than you do  (especially The Government),
and since the public is unable or unwilling to comprehend this concept of “global living,”  the financial system will have to do the job which individuals are too selfish to undertake.
  

jcaz's picture

This is classic academia bullshit.

The point of this exercise is to hide additional debt, period.

Gee, Stan- if I have one credit card charging me 8% on my $10K balance,  and I get a new card to transfer my balance for 4% with a new $20K limit,  I've doubled my GDP capacity, right?

This is the bullshit you're trying to sell us.

Fuck off.

nope-1004's picture

Fischer, like all bankers, is spreading disinformation and wrong reasoning to try to sway the public to accept their ludicrous policies.

These idiots are total fucking idiots.  They are so far down the rabbit hole now with destroying the value of our currency that they publicly start to lie about it and praise their insanity.  The disinformation campaign is in high gear.  The media praising theft by calling them "heroes" proves that the media is complicit, or owned, by these liars, crooks, and control freaks.

They all belong in prison.  These crimes against humanity are global and generational.  What they are doing is crippling humanity.  No other single leader, in the history of the world, has had this much power and influence over this many people, by indirectly controlling their household balance sheets.

At some point, the moneychangers need to HANG !!!!!!!!!!!!!!!!!!!!!

The Once-ler's picture

   
 …  To me,  he looks  EXACTLY LIKE
   
             Homer Bedloe
   

JRobby's picture

Bulldoze them and all their textbooks into an open pit.

Burn, cover up.

espirit's picture

Market overheat?

What the fuck kind of kool aid are you drinking?

mtl4's picture

Do you really think stocks are still making new highs based on fundamentals?!

JRobby's picture

Grind his bones and dump the grinds into a barrel of sand at an icy driveway.

Then, and only then would he have some use.

Citizen_x's picture

"Eat, drink and be merry, for
tomorrow we die." As said in
the last days of the Roman Empire.

This clown just said you are
better off in the pump and dump,
than in savings.

But he's hawkish one day and today
well...hmm ?

Minus interest rates are similar
to a Tax, just not as obvious to
the masses. And does NOT go threw
Treasury.

Creative_Destruct's picture

Fukin' eh yah, party on to hell.

MalteseFalcon's picture

OK.  Let's see what the effect will be on the $, gold and the west in general.

BTW Stanley's previous position was the head of the central bank of Israel.

That is a fact and not a conspiracy theory.

So who's running the FED - Yellen or this guy?

StackShinyStuff's picture

Some people need to be smashed over the head with a baseball bat and put out of their misery.  Just sayin'...

Xscream's picture

may i suggest  Nagen using lucille 

Bilderberg Member's picture

The Federal Reserve is a money loser with higher rates, negative rates will add productivity to the government not our economy.

Arnold's picture

There is a raging debate about the efficacy of negative interest rates for central banks, for governments, and again for banking itself.

"There's your confession Inspector," said Holmes. "Even Watson could show more guile."


VegasBob's picture

Just another delusional member of the Tribe.

Tunga's picture

Clearly guillotines have lost their psycological effect. 

Refresher courses should be offered for a minimal charge.

 

Life of Illusion's picture

 

Fischer to old for IMF sent to FED,,,dollar destruction.....

IMF G20 IMS new policy

 

http://www.imf.org/external/np/pp/eng/2016/072416.pdf

 

http://g20.org/English/image/201608/t20160801_3107.html

 

 

Pooper Popper's picture

I am losing whats left of my mind,,,,,,,

consumer confidence came in today,,,

http://www.forexfactory.com/#detail=62301

101% confidence???????????????????

No fucking words people,I have no words to describe this level of corruption!!!

Survey of about 5,000 households which asks respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation;

stocktivity's picture

To the 1%, it's not bizarre at all. To the rest of the 99% that the 1% ripped off, it's bizarre.

Cognitive Dissonance's picture

I wonder when the last time was that Stanley Fischer walked into a grocery store and bought a gallon of milk. Or just walked into a grocery store.

Yeah, I thought so. Cognitive Dissonance anyone?

This is not a stupid person. Either he is a useful idiot or just an idiot.

ParkAveFlasher's picture

He knows what he is doing.  He knows he is doing evil.

Here2Go's picture

That makes him a "juice"~FULL idiot

 

I'm just here to help

 

spastic_colon's picture

I stopped reading at "Stanley Fischer's Bizarre......."

Here2Go's picture
Here2Go (not verified) tarsubil Aug 30, 2016 12:19 PM

probably needs to be asked...

<---francis_sawyer

<---Stanley Fischer

 

MINUS 1-3 for the inevitable Las Vegas Dave (& friends) votes...

Kaiser Sousa's picture

KILL ALL BANKERS.

 

DEATH TO THE FUCKING MONEYCHANGERS...

ESPECIALLY FISCHER U ZIONIST KHAZAR MOTHER FUCKING SATANIC SOCIOPATH.

Ignatius's picture

I love watching 'em slap lipstick on that pig called privately held central banking, like carnival barkers putting her up on the block like some prized heffer.  What a racket.

espirit's picture

I wonder who the next greater fool is going to be?

Damn, that be us.

All the other Elvis's have already left the building.

HopefulCynical's picture

Wouldn't the plural be Elvii?

Condition 1SQ's picture

Hah!  Which equities?  Oh yes, the equities tied to companies who are large enough to cut through all your regulatory bullshit.  The big boys.  Basically he's saying, savers, you're about to get fucked, so you'd better donate your money to the companies we support.

The Duke of New York A No.1's picture

The 11th commandment from the Bible; The TPTB shall be judged by the overall performance of the stock markets.

Here2Go's picture

You're right you see...

 

Most GOY don't know that there were actually 15 Commandments (but 5 were lost)...

 

https://www.youtube.com/watch?v=Ah-WdAwVg9c

SubjectivObject's picture

These phukkerz can say any goddamned thing and the status quo media, alogorithms, and peon public treat it as resonable and normal practice.  

They get no immediate, significant, authoritative, cogent, or articulated rebuttal to their relativistic misdirections, which encourages them to continue in the same fashion.

E.Shackle.Ton's picture

Just as inflation is a thief, so also are negative interest rate.  The CB's are promoting both.  Therefore they are thieves.

Bay of Pigs's picture

Not only theives but financial and economic terrorists.

Herdee's picture

He's following the Greenspan theory that the secret to economic success is the stock market at any cost.

RopeADope's picture

To do otherwise would entail difficult thinking. And difficult thinking has an unpleasant tendency to separate the wheat from the chaff.

Whenever central bankers talk about stock prices they are really saying "I am afraid of losing my job".

PGR88's picture

 

Who cares if 95% of the population is having their savings and labor stolen by bankers and leftist-fascist government?   Its working, damnit!

Yen Cross's picture

  Fisher needs to be dipped in vat of boiling oil feet first.