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Post by nyx on Mar 15, 2020 21:43:13 GMT
OK posters does a bank still have savings account when the interest rate is zero?
I have never seen this in my 74 years!
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Post by SysConfig on Mar 16, 2020 1:32:11 GMT
It means your savings will get crap if any interest..and likely you will be paying the bank to keep your money there..the idea is to keep money flowing ....by..you guessed it..shopping! So do your patriotic duty...Jesus no longer saves..he shops! The gubbamint can borrow at lower interest to deflate the bubble a bit..but we know know they are not in the business of saving you money ...never ever were
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Post by HAL on Mar 16, 2020 18:03:40 GMT
Exactly right.
And some countries are using negative interest. which does mean exactly what it says. You pay the bank to hold your money.
I've been getting 0.1% on my savings account for a long time.
HAL.
P.S. forgot to mention.
How is zero percent interest supported. easy.
The fed just prints more money.
Hasn't it just been made screamingly obvious that the nation is living on debt ?
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Post by nyx on Mar 16, 2020 19:05:32 GMT
Negative interest rates paying the bank to hold your money sounds criminal.
The word recession must be really freaking the Federal Reserve out.
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Post by HAL on Mar 16, 2020 19:34:20 GMT
Technically the US is already in a recession.
Just how deep it will be is anyone's guess.
All this was predicted three years ago. But the virus has exacerbated things.
During the great depression the stock market dropped 500 points.
last week it dropped 2000.
Hang in there.
HAL.
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Post by SysConfig on Mar 16, 2020 20:27:06 GMT
Good points Hal I was curious how that take a negative interest mortgage out and get paid by the bank was working out..Still difficult to wrap my head around but it sounds a lot like buying an overpriced vehicle at a fixed price with a discount thrown in..and prorating the discount over the life of car note..the savings is illusory ...like jewlery at 200 percent off....but off of what?...and the tax man not interested in negative tax receipts unless this is a depreciable asset and make allowances..no ...Tax collectors would be averse to this.
As far as the Fed..the good thing we may be looking at Dead Fed Walking..The little germ exposed the fake house of cards between all the bankers...making it easier to get rid of..something thought impossible 6 months ago..this may be a silver lining .
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Post by HAL on Mar 17, 2020 13:39:50 GMT
Can't see any silver lining myself.
The idea is that a country (or a person) produces a product and sells it to someone who gives him money.
The seller then uses this money to buy something he wants while hopefully retaining a bit as saving for a rainy day.
So if the person (country) isn't producing enough product to bring in enough money to buy what it needs than what doe sit do ? It borrows from someone who has some money in reserve. Usually this is a bank.
The banks are holding the spare money of the people.
But what happens when the banks have no money ? when they have lent it all out.
I notice that Trump has made it possible for the banks to have NO reserves. After 2008 Obama made it so the banks had to have a large reserve to avoid the Lehman Bros situation happening again. Trump has unwound that.
So if people get panicky they can cause a run on the banks by trying to gt their money out. we had the Northern Rock debacle.
With no Fed, how would you re-capitalise the banks. ? Where would the money come from ? Borrowing from Peter to pay Paul eventually stops. One day Peter wants his money back.
Printing will only cause great problems in the not too distant future when inflation will kick in. Then those at the bottom end of the food chain will not be able to afford to live.
And that will be the next thing that will happen.
I know it goes against the grain, particularly for Republicans, but you guys really should listen to Peter Schiff's podcasts.
Ignore his stuff on gold if you wish. After all, selling gold is his business. But take note of his general comments on the economy.
He is right.
HAL.
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Post by HAL on Mar 17, 2020 13:42:41 GMT
Additional,
Who in their right mind is going to put money in a bank if any moment the bank can go bust ?
And if the banks are paying zero interest with the promise of negative interest in the future, you may as well hide your cash in a hole in your garden. At least it should still be there if the banks fold. If it is in the bank it can simply disappear.
Bear in mind that most people's wages are paid into banks automatically.
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