Negative interest rates:

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Tony S

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I wondered how long this would take to rear its ugly head.

Some European banks are proposing charging you to keep your money. The predictions are that zero rates should be achieved by the year end.

The world's economy is in turmoil.

 
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I am sure we discussed this before (or was it somewhere else)

It is already a reality in Denmark. You can get a mortgage that pays YOU and to keep savings they charge you.

Knowing how the Brittish do things, as soon as the banks announce negative rates, everyone would go and withdraw their savings and put it under the bed, That would be the ultimate run on a bank?  Safe deposit boxes would soon be in high demand and burglary would become more common if people generally kept their life savings at home.

Quite what happens when the next recession starts. That is when rates go down to stimulate growth, only they never went back up in the last "boom" so -ve rates here we come.

So, if I can go to the bank and get a loan that pays me interest, why would you not, even if you don't want the money?  Borrow £1m keep it safe (deposit box) so you can repay the "loan" and the interest should be a substantial income?

There is just so much about it that makes the mind boggle.

 
It was me, on here, that mentioned negative interest rates.

countries around the globe aimed for 2% inflation, which is a bit low imho, so that’s contributing to lots of things, with unintended consequences ...

quantitative easing (printing money out of thin air) hasn’t helped either

 
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Yes looking back, "normal" rates of 10% and inflation about the same, everything was so much easier with scope to raise and lower rates without hitting a "complication"

 
It's in a safe 40 miles away and 10 Ft  below ground level.  :Salute

BTW the weird looking blank coin (the reflection is of my ugly fizzog) are like hens teeth.


i think I've solved the riddle as to why you don't sleep, its not insomnia you are sufferung with, its anxiety of having your treasures buried in someone else's yard!

 
I posted a couple of weeks back on how weird  it is to have my ISA rates dropped ..again... and the building society encourages me to leave .

Surely a building society functions by holding people's saving  , with interest at 1% say ....   and lending to housebuyers at  2% .

I also posted once on how the average working man ,  say semi - skilled /wife /kids /house /car/    hardly keeps his head above  water .

HM Gov  takes  two big slices  off his wages  before he gets it ...... claws even more back every time he  fills the car / taxes the car/ insures the car/  buys anything at a wopping  20%  VAT  tax   / another wopper if he  smokes or drinks  / another one to watch TV for a year .......then his local council nail him for local taxes .

HM Gov  don't like the self employed ,  they lose some control ,  Communism  is about control , everyone working for the State , the Common Good , everyone controlled  & in their place .    

A SE plumber / sparky  etc  might do a job for this dreadful thing called "Cash "    OMG!!!!!     Or what if you did a job for a farmer who paid  you in chicken  , lamb & eggs  ...how can we tax that !!!  

Prime Minister John Major  said  that the working man should have ,  at the end of the working week ,   at least a little cash  jingling in his pocket to spend as he wished .

He did ****** all about it .........but at least he said it ...I heard him.    

 
Do you not think there is a reason for this huge push towards a cashless society? If there is no physical cash then there is no issue because everything then just becomes an irrelevant number. This is how the banks work, there is very little cash in circulation but there is apparently a huge amount of debt? A huge amount of wealth? When in reality it is only a figure on a computer screen. Could you imagine if all these mega rich people asked for all their assets to be paid out in physical cash, we’d soon run out of physical cash. But whilst it’s all on paper it’s always portrayed that we have a strong economy etc, yet ask the regular working man/women or family and most are so close to collapse, so how can it be that we are a wealthy nation with a strong economy If so many are so close to collapse? We have even had large corporates collapse, I think someone somewhere is feeding a load of bull.

 
If negative interest rates do happen here, then the working man with only modest savings will be able to draw his savings in cash and put them somewhere safe to avoid paying interest to store them in a bank,

It is the Rich, with £millions who won't be able to do that and will be stuck paying interest. But I guess they will just move it offshore.

I too can't understand how the building society model would work.  In theory they would collect interest from their savers and pay it to their borrowers, except there won't be people queuing up to put money into a building society so they may not have many savers paying them interest. 

 
 But whilst it’s all on paper it’s always portrayed that we have a strong economy etc, yet ask the regular working man/women or family and most are so close to collapse, so how can it be that we are a wealthy nation with a strong economy If so many are so close to collapse? We have even had large corporates collapse, I think someone somewhere is feeding a load of bull.
It's a great economy for those fleecing the ordinary working man, just look at those Equity Release scams, and the likes of Amazon who do tons of business but pay ****** all tax in the UK. This country is not being run for the majority, it's being run for the minority that we apparently can't do without, and we should be grateful for the crumbs they drop for us. 

As for the corporates, notice how the management always get paid, as most of those collapses are due to hedge funds, eg Toys R Us, bought out be a hedge fund with borrowed money, the company was then forced to service the debt which left it starved of money to invest in on-line shopping, net result dead in under 5 years. Hedge fund basically asset stripped it for their own personal gain and destroyed a viable business.

 
Another thing  !!   How is it that the management of  huge companies walk away when they cause them to go bust through bad or fraudulent dealing .  

How can a certain construction company take on mega contracts when they know they can't fund the progress  or pay suppliers & sub- contractors.   

 
Earlier in the year the kids bought us one of those fire-stick thingies so you can access other stuff on your TV....

Plus our eldest daughter has some sort of multi-user package with Netflix so we could, piggy-back without registering etc ourselves...

ANYWAY!!  last weekend Mrs SpecLoc was scrolling the menus looking for something to watch...

Stumbles across "The Laundromat" which has Meryl Streep & few other well-knows in it...

So we watched it...

https://www.netflix.com/gb/title/80994011

https://en.wikipedia.org/wiki/The_Laundromat_(film)

Not a film to put on your top 50 favourites....

But not naff...  easy enough to watch and enjoy over a cup-o-tea and a bit of cake on a Sat evening if you are bored with "Strictly" & Quizzes,  or repeats of Midsomer Murders!!!

So basically it pretty much sums what is wrong with massive chunks of the modern finance industry...

It specifically relates to a real-life finance scandal..    "Mossack Fonseca"

https://en.wikipedia.org/wiki/Mossack_Fonseca 

But the principals are the same with loads of business, screwing people out of their hard-earned dosh...

Then becoming a never ending paper trail trying to find anyone who can explain why your money/investment/financial product/ etc..

has just evaporated into thin air with no-one traceable or liable for the cock-up!!!

Guinness

 
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