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Are you ready, faggots? Here it comes
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You are currently reading a thread in /biz/ - Business & Finance

Thread replies: 34
Thread images: 4
Are you ready, faggots? Here it comes

http://www.wsj.com/articles/bank-of-japan-introduces-negative-interest-rates-1454040311?mod=e2fb
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>>1066812
ought to be interesting considering Japan's economy and upside down labor population.
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been waiting for this moment

ready for my money now
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>>1066812

It looks like the world economy isn't recovering after all.
I wonder what the FED will do once China devalues its currency.
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>negative interest rates

How does that even work?
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Goddammit Japan, why didn't you buy ether???
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>>1067126
It costs money for member banks to have deposits at the central bank

This is passed on to the consumer by the member banks, presumably encouraging them to withdraw their money and spend it

It's targeted at destroying the saver class in the name of gdp growth because muh statistics
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>>1066812
https://www.youtube.com/watch?v=3XTnuRqoOUU

america just had 0.7% gdp growth for the 4th quarter of 2015

last year they bragged about 6% that was later dropped to a 2.4%. their opening faggotry is 0.7%.

the betting man might see negative gdp growth being seen for the 4th quarter of 2015
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>>1067151
So this is in no way sustainable, or how you would ever want to to structure an economy, right?
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>>1067162

It's called Keynesian economics and its the worst kind of economic policy-making.
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>>1067162
It's not meant to be sustained indefinitely. There are numerous times where it's been turned on and off by different countries. Namely the Swiss
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>>1067167
Zirp wasnt meant to be sustained either. but it is and will be.

once you build all this debt artificially high, you cant normalize interest rates without a crash
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>>1067164
to be fair to keynes, he must be rolling in his grave for what politics did to his theories.

Though the same probably applies to Hayek or Schumpeter too
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>>1067162

It's wealth redistribution, from the savers to the borrowers.
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It's a negative nominal rate you faggots. Inflation is 2% over there. They are still earning real value on the money they have in the bank.
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>>1067215
Inflation still affects money on deposit. This actually slightly magnifies it.
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>>1067183
>but it is and will be

But it's currently not zero?
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>>1067215
it's not 2% just yet. that's their goal lol
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>>1067215
other than the announcement of abenomics and like 3 months before the crisis, japanese inflation has barely touched 2% since the 80s, and is negative more often than positive

there's no way to calculate their real growth rate except guessing, but it is definitely negative and probably has been since the asian currency crisis
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Let's say you live in the US. You've got 50K cash in a savings account, saving for a house. The FED adopts a negative rate policy before you hit your savings goal.

What do you do with your money? Stuff your mattress?
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>>1067265
Buy gold
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>>1067215
how does that make any fucking sense? You understand inflation adjusts downward?
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>>1067126
in theory, negative rates are supposed to encourage economic growth by penalizing money hoarders, and trying to force them to spend the money they would've lost had they left it in the bank.

Japan's timing on this might be catastrophic, because if the world is going through another downturn this year, forcing companies and people to spend money when they 100% dont want to due to a recession is not a good thing
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>>1067164
This isn't Keynesian, you dumbass. It's Monetarist.

A Keynesian solution to this problem would be to print money and dump it into the economy. Which I still don't understand why nobody is doing. QE is kinda close, but it doesn't aid inflation because they just buy assets from large corporations that don't want to spend the money they get for it.
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Significantly more PBoC devaluation this February. Possibly this weekend.
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>All the goldfags come out in every fucking monetary policy thread

Why is /biz/ so bad at economics?
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>>1067657
Has such a thing ever happened before?
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>>1067739
I know the Swiss have done negative rates several times I the past, but I don't think anyone instituted negative rates on the eve of a financial collapse.
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>>1067673
Keynesian would be deficit spending surely? Helicopter drops are always used as an example of Monetarist policy.
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>>1067729
In Midas We Trustâ„¢
Thats why
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>>1067729
Ha, if anything this will continue the inevitable demise of all fiat currencies when the ECB and Fed do the same thing. The masses will not put up with this for long though and only then will we see the rise of bitcoin. Yeah I said it.
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One guy said, deficit spending could be the answer. Japan's negative interest rates have to do with their marginal propensity to save. If C+I+G+X=economy, or C+S=closed economy Savings at 25% should be huge, but it is contraindicated in that to much access to investment dollars leads to lower and lower interest rates. The powers that be can no longer manipulate the economy because interest and inflation cannot be control externally. The Yen grows stronger and interests rates go down, because in this instance inflation and interest rates are inverse.
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I think the solution is in the ISLM model and the FED would buy dollars by selling bonds.
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>>1067729
exactly 1 person mentioned gold before you
Thread replies: 34
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