Here is an example of the money madness Cdn LIE-berals are considering:
How Canada is flirting with a bizarro world of negative interest rates 17/24
Financial Post. By John Shmuel. April 8/ 2017
When the European Central Bank meets in March, markets anticipate that it will cut its already negative deposit rate further, deepening Europe’s multi-year experiment with sub-zero interest rates, which began in June 2014.
(IN other words, European bankers are so broke they resent it when citizens actually SAVE MONEY! They want their people to run right out and BUY! And does that not sound like the novel Brave New World? Or look at our very own Jackass John- the Sorry Tory mayor of Toronto who thinks it would be good to TAX people extra who own houses and do not either live in them or rent them out! That is municipal style negative money!)
A new report suggests fearful investors are sitting on a record $75-billion in excess cash in their portfolios, the biggest hoard in Canadian history.
(And Cdn bankers apparently are just as resentful of savers as their European cousins! With the added bonus that LIE-berals are fearful of another HUGE market melt down if our debts- both public and private- becomes even more unmanageable than they ALREADY ARE! Hence the new LIE-beral mortgage rules that have killed off so much of the Toronto housing biz- with many people caught off guard by that LIE- beral attack on the last/best investment left to ordinary Cdns!)
The ECB currently charges banks to park money with it as part of a policy where the official deposit rate is set at -0.3 per cent. In a normal interest rate environment, it would be paying banks that leave their money in its vaults. Three other countries — Denmark Sweden and Switzerland — now flirt with deposit rates as low as -0.5 per cent.
(So bankers think it is a good idea to CHARGE customers for the privilege of STORING any money they did not immediately run out and squander at the first chance? NO wonder Europe is bankrupt!)
The experiment in Europe is being closely watched around the world, including by policymakers here in Canada. Bank of Canada Governor Stephen Poloz discussed negative rates at a luncheon in Toronto last month, putting it on the radar here. While he said that addressing negative rates was no indication the bank planned to use them, it nevertheless shows that Poloz and his team are weighing all options as the economy struggles to grow.
(LIE-berals are DESPERATE for more gravy and they are even more pissed at corporate savers than ta private ones! LIE-berals consider that corporate money sitting in a bank account is being WASTED! SO much for saving for a rainy day!)
Negative rates are certainly an anomaly in economic policy. So far, enacting the policy in the eurozone hasn’t led to the kind of bizarro scenarios that negative rates can conjure up — getting paid to have a mortgage, being charged to leave your money with banks.
(The LIE-beral obsession with deficit financing is allowing us to explore prevously un-imagined levels of debt and bankruptcy! The only country more indebted than Ontari-owe was Weimar Germany- and that debt was solved - for a while- by Adolf Hitler! We are allowing LIE-berals to play with fiscal fire!)
Even in the event that the Bank of Canada ever adopts such a policy — which seems less likely following this month’s optimism from Poloz — it is unlikely that consumers would see much of a change from the current interest rate regime, say experts.
(On the other hand- who could have expected the recent rise in oil prices? And who would have expected Our idiot Boy to be running up against a NAFTA dead line imposed by Yankee Congress- with DIRE results for Canada if a deal is NOT done! That LIE-beral fiscval fire may bunr us badly in no time at all!)
“The Bank of Canada can do a lot with the aggregate number, and it’s up to banks how they pass that on to consumers,” said Moshe A. Milevsky a professor at the Schulich School of Business at York University. “But consumers will never put their money into a bank account that charges them a negative interest rate.”
The entire purpose of negative rates is to make it expensive to sit on cash. Theoretically, that will force any cash holders in the economy to put their money to use, whether it’s business deploying capital on new machinery or breaking new ground on projects or investors putting their money into the stock market. The hope is that the incentive to spend will grow the economy. For countries struggling with problems such as deflation — the eurozone is a prime example — it is hoped that all the renewed spending will bring inflation closer to the two per cent mark favoured by central banks.
(To bad LIE-berals do not want to consider what a crap shoot the stock market is at the best of times! Cdns are right not to trust the financial “advisors”!)
Some countries have had success with negative rates propping up the economy in other ways. Denmark, for instance, was able to get ahead of the ECB by lowering its rates even further, preventing an appreciation in the Danish krone. That has helped keep exports healthy and has registered respectable growth in the economy.
But zero rates have created problems, too. In Sweden, the country’s financial regulatory agency has warned that the cost-free borrowing of negative rates has created a housing and stock market bubble that will be difficult to deflate.
(And we Cdns KNOW the cost of deflating a housing bubble! One has only to look at house sales in spring 2018 to recognize that a LOT of people who put their money into housing as it was the last, best investment left to ordinary people got STUNG when LIE-berals changed the mortgage lending rules! The drop off in housing sales translates into money that people hoped to have for their retirement is now GONE!)
Ultimately, negative rates here would simply cost consumers more than anything, Milevsky says. Because banks would be forced to pay the Bank of Canada, they would pass on those costs to the consumer using a tactic common amongst Canadian banks — user fees.
“What you might see happening is a negative interest rate masquerading as higher fees,” Milevsky said. “No bank in their right mind would tell a consumer, give us your hundred dollars and we’ll give you 95. That will never happen.”
(And is that not JUST EXACTLY what IS happening? User fees do amount to being charged for storing your money! WE all know that banks PAY NO INTEREST on a chequing account and they pay a PITTANCE on a savings account! Bankers no longer need our saved pennies because LIE-beral fiscal madness lets them pull money out of the air- bankers and LIE-berals treat our saved pennies with disdain! If ordinary people printed money at the rate bankers are , WE would go to jail for forgery! )
So while some might dream of a negative interest rate environment where the bank pays you to have a mortgage, even in an extraordinary rate environment, that is very unlikely to happen.
(Yeah- not likely to happen unless LIE-berals manage to dig us as deeply into debt as the Europeans- if that happens all bets are OFF! Otherwise WHY are LIE-berals DISCUSSING these negative finance options unless it is a policy trial balloon?)
