negative interest rates

[watgate]

As more countries central banks are resorting to implementing negative interest rates to ostensibly jump start their sagging economies, how do you feel about your bank implementing negative interest rates and charging you for the privilege of keeping your money in the bank? If you have a problem with that, to what extreme would you go to avoid having to pay the bank for your money on deposit there? Would you withdraw all your funds and put it in your microwave like they are supposedly doing in Sweden? For you technically savy investors can banks prevent you from withdrawing all your money in the form of cash?

[swissie]

Negative interest rates are the last resort for the central banks, to "force" people to spend their money.

Not to forget: The astronomical sums of liquidity that central banks have been flushing the world with, were designed to cover the losses of Banks, Insurance Companies and entire states. Simply to avoid (postpone) the "meltdown" of all meltdowns.

And now: The Banks are still not lending. That being the case, how to "jump-start" the economy? = Pushing a string ?

The root of the fundamental problem may well be: Inflation is, when too many Dollars are chasing too few goods. These days and thanks to globalization, too few Dollars are chasing too many goods. A deflationary scenario.

We had a very similar situation before the crash of 1929.

.

PS: Countries can declare a "Bank-Holiday" to avoid cash-withdrawal-stampedes. Latest example: Greece.

Cheers.

[worgeordie]

Seems like the World is now run for people in debt,work hard an save and you just

loose with the inflation eating away at your savings,plus the future does not look

bright for receiving any half decent return, above inflation .

regards worgeordie

[Pib]

I don't know of any banks charging negative interest rates to their customers like you and me.

The negative rate is charged to those banks who do short term deposits with their country's central bank. Banks do this when they don't want to lend/invest the money...prefer to set on it for a while until they find a good investment/can loan it out on good terms to credit worthy folks/businesses.

But with central banks charging a negative interest rate to banks the central bank hopes that will spur the banks to loan the money which helps the economy/folks like you and me instead of wanting to deposit the money with the central bank in hopes of earning a little bit of short term interest.....but with negative interest they earn no interest and instead have to pay the central bank a little to keep money with the central bank.

[swissie]

I don't know of any banks charging negative interest rates to their customers like you and me.

The negative rate is charged to those banks who do short term deposits with their country's central bank. Banks do this when they don't want to lend/invest the money...prefer to set on it for a while until they find a good investment/can loan it out on good terms to credit worthy folks/businesses.

But with central banks charging a negative interest rate to banks the central bank hopes that will spur the banks to loan the money which helps the economy/folks like you and me instead of wanting to deposit the money with the central bank in hopes of earning a little bit of short term interest.....but with negative interest they earn no interest and instead have to pay the central bank a little to keep money with the central bank.

Quote: "I don't know of any banks charging negative interest rates to their customers like you and me."

=Not yet!

The "free money" that Banks receive and are not willing to inject in form of KMU - Loans in favor of productive companies, are being used as before: Gambling Money! If the "Bank" wins on a Trade. the "traders" still get their bonuses. If the trade goers sour. the taxpayer will foot the bill.

2016 will be an interesting year in many ways,

Cheers.

[BuaBS]

Why wait for negative interest rates? If banks now give you less than 1 % ( in europe) , and your money is going to be used for bail-ins , and your privacy ( how much you own) is completely gone , your money can be taken away at anytime by governments and or just blocked by the bank...why still have your money there ? If you want to lose it to them, just keep it there. I'd be VERY nervous to keep my money in a bank like Deutsche bank right now.

I did my silent bank run 2 years ago. The only account I still have is because I'm forced by Thai immigration to hold 800 K in a bank. As soon Thai banks give me less than 0,5-0,75 % , I'm taking everything out for 9 months/year. Just the 3 months before I need the retirement extension , will I have my money in the bank. I don't want them to profit off my money.

More people should do this : starve the beast.

[elgordo38]

Seems like the World is now run for people in debt,work hard an save and you just

loose with the inflation eating away at your savings,plus the future does not look

bright for receiving any half decent return, above inflation .

regards worgeordie

And these same government idiots are trying to encourage you to save for your retirement what a joke. I listened to all their garbage for years saving my money and look where that got me. They want people drowning in debt to spend more what a joke. Then they do a U turn and tell people they have to much debt so which is it. These Central banks have no clue what to do. The world is in a mess.

[elgordo38]

I don't know of any banks charging negative interest rates to their customers like you and me.

The negative rate is charged to those banks who do short term deposits with their country's central bank. Banks do this when they don't want to lend/invest the money...prefer to set on it for a while until they find a good investment/can loan it out on good terms to credit worthy folks/businesses.

But with central banks charging a negative interest rate to banks the central bank hopes that will spur the banks to loan the money which helps the economy/folks like you and me instead of wanting to deposit the money with the central bank in hopes of earning a little bit of short term interest.....but with negative interest they earn no interest and instead have to pay the central bank a little to keep money with the central bank.

The result is what my bank is doing. 2 years ago they were paying 2.10% then last year dropped it to 1.65% and now down to 1.45% and this is one of the better ones that pays you monthly. Then you have to worry about not going over $100,000 because if they go belly up that is all the government will pay what a disaster.

[Asiantravel]

I don't know of any banks charging negative interest rates to their customers like you and me.

The negative rate is charged to those banks who do short term deposits with their country's central bank. Banks do this when they don't want to lend/invest the money...prefer to set on it for a while until they find a good investment/can loan it out on good terms to credit worthy folks/businesses.

But with central banks charging a negative interest rate to banks the central bank hopes that will spur the banks to loan the money which helps the economy/folks like you and me instead of wanting to deposit the money with the central bank in hopes of earning a little bit of short term interest.....but with negative interest they earn no interest and instead have to pay the central bank a little to keep money with the central bank.

" I don't know of any banks charging negative interest rates to their customers like you and me."

Small Swiss bank become first to hit savers with negative interest rates - CHARGING them to take their money

http://www.thisismoney.co.uk/money/news/article-3329324/Swiss-bank-ABS-hit-savers-negative-rates.html

[Suradit69]

how do you feel about your bank implementing negative interest rates and charging you for the privilege of keeping your money in the bank?

In the past I had checking/current accounts in banks that paid no interest to me and charged me monthly account fees for the privilege of allowing them to keep my money in their "safe" hands. The account I have now in the US pays no interest and has no charges for most services, but banks still have any number of ways to hit you with fees for this and that, which amounts to the same thing as negative interest rates.

Banks still need your money to make stupid investments and loans that are never repaid so that they can demand governments to bail them out in order to pay obscene amounts to the executives whose expertise caused the losses.

Central banks use negative interest rates to hold money from commercial banks to (supposedly) stimulate their economies and make their currency cheaper as well as to demonstrate to the world that they're truly up a creek with no paddle, but commercial banks are unlikely to be so obvious with their customers. They'll still pay some ridiculously low interest on savings and find other ways to screw you ... like charging 20% on credit card balances.

The Bank of America CEO got a nice pay rise announced a couple of days ago. You can't expect them to pay their execs without stealing the money from somewhere.

Bank of America Increases CEO Moynihan's Pay 23% to $16 Million

http://www.bloomberg.com/news/articles/2016-02-12/bank-of-america-increases-ceo-moynihan-s-pay-23-to-16-million

Here's a chart of BAC's stock price to demonstarte the great job he's been doing.

Edited February 14, 2016 by Suradit69

[Bullie]

Well, in the Netherlands you could say that there's a negative result already to having money in the bank. Any savings over 21,500 euro's are taxed at 1,2 % on a yearly basis. The Government joyfully assumes you're making atleast 4 % interest, you see. Combine that with a maximum interest rate of 0.5 % yearly, and it stands to reason that you'd be wise to put your savings in a safe place - and that's not the bank anymore!

Since the European charlatans at the ECB are aware of this, they have now started a campaign to eradicate cash as much as possible, beginning with cancelling all 500 euro notes. Although officially it's supposed to be in our own interest, to make it harder for terrorists and the like, but a not unwelcome side effect (some claim the main reason) would be that we would be unable to take our money out of the banks.

[Pib]

Many banks have lowered their interest rates (even to zero on many current/checking accounts) and/or have account maintenance fees per month. And with a maintenance fee the bank is basically charging you to keep your money, but that is not negative interest. Absolutely nothing new about that....been around for a long, long time. But until a person sees on their account statement they are receiving a negative interest rate they are not being hit with negative interest.

[topt]

Why wait for negative interest rates? If banks now give you less than 1 % ( in europe) , and your money is going to be used for bail-ins , and your privacy ( how much you own) is completely gone , your money can be taken away at anytime by governments and or just blocked by the bank...why still have your money there ? If you want to lose it to them, just keep it there. I'd be VERY nervous to keep my money in a bank like Deutsche bank right now.

I did my silent bank run 2 years ago. The only account I still have is because I'm forced by Thai immigration to hold 800 K in a bank. As soon Thai banks give me less than 0,5-0,75 % , I'm taking everything out for 9 months/year. Just the 3 months before I need the retirement extension , will I have my money in the bank. I don't want them to profit off my money.

More people should do this : starve the beast.

I am curious as to what you did with the cash (presuming it was more than a few k) - and where would you keep the 800k in Thailand if you did as you suggest?

Also closing your home bank account can be a bit like burning your bridges........

Edited February 15, 2016 by topt

[BuaBS]

Why wait for negative interest rates? If banks now give you less than 1 % ( in europe) , and your money is going to be used for bail-ins , and your privacy ( how much you own) is completely gone , your money can be taken away at anytime by governments and or just blocked by the bank...why still have your money there ? If you want to lose it to them, just keep it there. I'd be VERY nervous to keep my money in a bank like Deutsche bank right now.

I did my silent bank run 2 years ago. The only account I still have is because I'm forced by Thai immigration to hold 800 K in a bank. As soon Thai banks give me less than 0,5-0,75 % , I'm taking everything out for 9 months/year. Just the 3 months before I need the retirement extension , will I have my money in the bank. I don't want them to profit off my money.

More people should do this : starve the beast.

I am curious as to what you did with the cash (presuming it was more than a few k) - and where would you keep the 800k in Thailand if you did as you suggest?

Also closing your home bank account can be a bit like burning your bridges........

You understand that I 'm not keen to give that information.

Closing your bank accounts is not like burning bridges. It's becoming more invisible , off grid. Back home they don't have much on me : no bank accounts , no social media , not living there, no property, no income and no taxes,...

Opening an account again is easy.

[topt]

Why wait for negative interest rates? If banks now give you less than 1 % ( in europe) , and your money is going to be used for bail-ins , and your privacy ( how much you own) is completely gone , your money can be taken away at anytime by governments and or just blocked by the bank...why still have your money there ? If you want to lose it to them, just keep it there. I'd be VERY nervous to keep my money in a bank like Deutsche bank right now.

I did my silent bank run 2 years ago. The only account I still have is because I'm forced by Thai immigration to hold 800 K in a bank. As soon Thai banks give me less than 0,5-0,75 % , I'm taking everything out for 9 months/year. Just the 3 months before I need the retirement extension , will I have my money in the bank. I don't want them to profit off my money.

More people should do this : starve the beast.

I am curious as to what you did with the cash (presuming it was more than a few k) - and where would you keep the 800k in Thailand if you did as you suggest?

Also closing your home bank account can be a bit like burning your bridges........

You understand that I 'm not keen to give that information.

Closing your bank accounts is not like burning bridges. It's becoming more invisible , off grid. Back home they don't have much on me : no bank accounts , no social media , not living there, no property, no income and no taxes,...

Opening an account again is easy.

Not in the UK if you are still based here and for whatever reason want a UK onshore account. Many forumites have reported issues unless you actually physically go there to open/reopen a current account and hence my comment. If it works for you then fine........

[BuaBS]

Why wait for negative interest rates? If banks now give you less than 1 % ( in europe) , and your money is going to be used for bail-ins , and your privacy ( how much you own) is completely gone , your money can be taken away at anytime by governments and or just blocked by the bank...why still have your money there ? If you want to lose it to them, just keep it there. I'd be VERY nervous to keep my money in a bank like Deutsche bank right now.

I did my silent bank run 2 years ago. The only account I still have is because I'm forced by Thai immigration to hold 800 K in a bank. As soon Thai banks give me less than 0,5-0,75 % , I'm taking everything out for 9 months/year. Just the 3 months before I need the retirement extension , will I have my money in the bank. I don't want them to profit off my money.

More people should do this : starve the beast.

I am curious as to what you did with the cash (presuming it was more than a few k) - and where would you keep the 800k in Thailand if you did as you suggest?

Also closing your home bank account can be a bit like burning your bridges........

You understand that I 'm not keen to give that information.

Closing your bank accounts is not like burning bridges. It's becoming more invisible , off grid. Back home they don't have much on me : no bank accounts , no social media , not living there, no property, no income and no taxes,...

Opening an account again is easy.

Not in the UK if you are still based here and for whatever reason want a UK onshore account. Many forumites have reported issues unless you actually physically go there to open/reopen a current account and hence my comment. If it works for you then fine........

Why would I want to re-open an account back home while staying in Thailand ?

And it is possible to do so with the online banks. ( and if they don't allow copy of your identity via email , you can still have family send it to them via post).

[watgate]

To me it is becoming quite obvious what the World's Central Banks are striving for. Now that the European Central Bank and the US Federal Reserve are pushing hard to eliminate certain denominations, in the case of the ECB they want to eliminate 500 Euro notes and the US wants to eliminate 100 dollar US bills under the guise that it would be good to fight terrorism. It is only a mere coincidence that they are pushing to eliminate these denominations while the Central Banks of many countries are either utilizing negative interest rates or are headed for them. By eliminating these above mentioned denominations they will have made it much harder for individuals to withdraw their funds from the bank when the banks start charging you for the negative interest charges. There is more and more talk of Central Banks implementing electronic or virtual banking and circumventing a cash based banking system altogether, which if they were able to implement, would then have you for sure because then you would not be able to withdraw your money from the bank.

[Pib]

To me it is becoming quite obvious what the World's Central Banks are striving for. Now that the European Central Bank and the US Federal Reserve are pushing hard to eliminate certain denominations, in the case of the ECB they want to eliminate 500 Euro notes and the US wants to eliminate 100 dollar US bills under the guise that it would be good to fight terrorism. It is only a mere coincidence that they are pushing to eliminate these denominations while the Central Banks of many countries are either utilizing negative interest rates or are headed for them. By eliminating these above mentioned denominations they will have made it much harder for individuals to withdraw their funds from the bank when the banks start charging you for the negative interest charges. There is more and more talk of Central Banks implementing electronic or virtual banking and circumventing a cash based banking system altogether, which if they were able to implement, would then have you for sure because then you would not be able to withdraw your money from the bank.

IMO here's a good article from Money Magazine on the proposal to kill off some large denomination notes.

http://time.com/money/4226174/kill-100-dollar-bill-500-euro-phase-out/

[Naam]

To me it is becoming quite obvious what the World's Central Banks are striving for. Now that the European Central Bank and the US Federal Reserve are pushing hard to eliminate certain denominations, in the case of the ECB they want to eliminate 500 Euro notes and the US wants to eliminate 100 dollar US bills under the guise that it would be good to fight terrorism. It is only a mere coincidence that they are pushing to eliminate these denominations while the Central Banks of many countries are either utilizing negative interest rates or are headed for them. By eliminating these above mentioned denominations they will have made it much harder for individuals to withdraw their funds from the bank when the banks start charging you for the negative interest charges. There is more and more talk of Central Banks implementing electronic or virtual banking and circumventing a cash based banking system altogether, which if they were able to implement, would then have you for sure because then you would not be able to withdraw your money from the bank.

IMO here's a good article from Money Magazine on the proposal to kill off some large denomination notes.

http://time.com/money/4226174/kill-100-dollar-bill-500-euro-phase-out/

The point is that the sheer unwieldiness of using lower-denomination cash could be enough to disrupt criminal business models.

beam me up Scotty!