Central banks going full Zimbabwe! "The central message of this paper is that there are set of readily available approaches to enable DEEP NEGATIVE RATES that empowers the central bank"https://www.imf.org/en/Publications/WP/Issues/2019/04/29/Enabling-Deep-Negative-Rates-A-Guide-46598 …
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Consider this: from 2009 through 2016: -6% in 2009 0% in 2010 2% from 2011 on would have been better for savers than < .25 % from 2009 through 2015 and < .5 % in 2016 6% cumulative return instead of <2.25%. The negative interest rate counterfactual better for savers.
That's the macroeconomic astrologhyer's fantasy, that stealing money from people's bank accounts will bring about a magical economy recovery.
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stealing as in devaluing currency or by actual theft
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Actually taking the money. "Deep negative interest rates", or what was called a haircut in Cyprus.
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Damn. Heard about that but thought it was wildly out of bounds. Thanks for the reply.
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Despite this being an IMF paper, for the next few years at least "wildly out of bounds" is still probably more accurate in most places than "readily available measures". They have a whole spiel about how they need to introduce it slowly for it to become politically palatable.
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Imagine the exodus from savings accounts then
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Their theory is that people will thereby be incentivized to spend the money as the alternative to having it stolen. Same as the Keynesian argument for inflation, only a more direct theft. They don't even mention gold, cryptocurrency, real estate, art, etc. as alternatives.
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Ah, interesting stimulus package
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As in "may you live in interesting times." :-(
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We need a good portmanteau of "economist" and "astrologist". Maybe "econostrologist?" I feel bad smearing astrologists though, as some actually uncover difficult to explain statistical anomalies, while most economists just pull dogma out of their asses and present it as proof.
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Astronomers are useful to all, astrologers useful to some
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What do you make of modern solutions such as
@ProfSteveKeen's debt jubilee? Printing money, but direct injection to citizens' bank accounts as opposed to bank bailouts. Clears debt and stimulates demand, without transferring wealth from citizens to banks / finance industry. -
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See my post: "Helicopter Drops of Money Are Not the Answer"https://blog.supplysideliberal.com/post/139894253546/helicopter-drops-of-money-are-not-the-answer …
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Keynesian economics reminds me of religion: science is true whether you believe it or not, Keynesian economics (like religion) is supposedly true whether it's true or not.
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