Negative Interest Rates Proposed by Bank of England !!

Yes, the economy is so bad that the Bank of England are proposing NEGATIVE interest rates to try to stimulate the economy.

The idea is that banks will get charged money to store their cash with the Bank of England, rather than earning interest on it.

The reasoning is that this will encourage them to loan the money out thereby stimulating the economy.

So to put it in a nutshell, we got into this mess from too much money being loaned and in circulation, which ARTIFICIALLY grew the economy...

...and their answer to this problem is to go and do the whole thing over and ARTIFICIALLY stimulate the economy yet again.

Seems to me that they're just trying to keep it rolling along for as long as possible before the whole thing pops.

www.bbc.co.uk...

Crazy, just crazy.

reply to post by Power_Semi

So, simply put here....Business hates the economic climate and won't loan money. Hence, the economy stagnates. It's a bad situation, to be sure.

However, the solution wouldn't be to make the economic environment better and more conducive to business in a way that would sustain over a long recovery but to actually FINE and penalize the banks into a forced path of growth and support of loans?

I wish I could say England is being totally absurd...but after today's headlines show our own Bernanke making the argument for indefinite "easing" or currency dumping into the market? I suppose white really IS black and up has become down. Even core. basic economic principle is being presented as crazy while what has historically been a sure fire way to collapse an economy is now being touted as great if not wonderful to experience.

Someone mentioned Iceland awhile back for a place to live....I really need to check into that immigration policy. lol

And will the thrifty who work hard and save money with the banks for their futures have this passed onto them by the banks, effectively being charged for being a saver. If that happens you might as well withdraw your money and spend frivolously.
Seemingly far-fetched I know but if this idea is pursued to its logical conclusion why not.

Originally posted by hotel1
And will the thrifty who work hard and save money with the banks for their futures have this passed onto them by the banks, effectively being charged for being a saver. If that happens you might as well withdraw your money and spend frivolously.
Seemingly far-fetched I know but if this idea is pursued to its logical conclusion why not.

That, I think is the intended by-product.

The banks will if they get charged cut savings rates and try to claw more money out of their customers, so it'll be a bit of a gain on one hand for the economy, and a big slap in the chops with the other as overstretched citizens get whalloped some more.

They just want every £Pound in the country flowing backwards and forwards through the tills.

Originally posted by Power_Semi

Originally posted by hotel1
And will the thrifty who work hard and save money with the banks for their futures have this passed onto them by the banks, effectively being charged for being a saver. If that happens you might as well withdraw your money and spend frivolously.
Seemingly far-fetched I know but if this idea is pursued to its logical conclusion why not.

That, I think is the intended by-product.

The banks will if they get charged cut savings rates and try to claw more money out of their customers, so it'll be a bit of a gain on one hand for the economy, and a big slap in the chops with the other as overstretched citizens get whalloped some more.

They just want every £Pound in the country flowing backwards and forwards through the tills.

That is how I would interpret it as well. Any savings for my future will now be held under my mattress.

Loaning more 10 x deposits will only stack the debt. Short term stimulous = long term debt growth!

Will they ever learn!

The new Governor starting in July will kill that idea in a hurry.

Or will the Bank of England loan out all its money and skip town.

INSANITY!

Ponder what is being said here:

The BOE is saying the only way to solve the problem of too much debt is to PUT PEOPLE IN DEEPER DEBT! - INSANITY!!!

The BOE, which has created the problems in the first place, is offering a solution the problems they themselves created! - INSANITY!!!

The BOE does NOT loan out it's cash, it uses it's cash to PRINT money based on the cash it holds, along the order of 1000-1, so the BOE is saying the best way to solve a problem is to LEVERAGE the cash/deposit itself by forcing banks into LOANING IT OUT! - INSANITY!

The BOE is saying, "the way to solve the problem we have created, though the insane exploitation of the thoroughly reprehensible fiat currency system is to simply put everyone deeper into debt, thereby creating a greater need for our product - debt notes, thereby solving our problem." INSANITY, INSANITY.

Now, the only caveat I would add is that in a closed fiat currency system, one that is not predicated on CDS, Naked Short Selling, leverage etc. they prospect is not totally without merit, but in the hands of the madmen who created this global casino reality where, BY LAW, all losses are handed down to the 99%, their suggestion is insanity. - INSANITY!

Remember, when a loan is printed by the BOE, the Compounded Interest is NOT printed. So, when you borrow 100, and owe 300 back, ask yourself; "where does the extra 200 come from?" - INSANITY!

reply to post by Wrabbit2000


Hahaha I checked that immigration policy myself, it aint simple lol.

Instructions
1
Carefully check the time conditions in the Icelandic Nationality Act to ensure you have spent enough time in Iceland to qualify to apply for citizenship. Single foreign nationals will have needed to live in Iceland for seven years, while foreign nationals married to an Icelandic citizen will only need to have resided in Iceland for three years after the marriage.

2
Secure at least two testimonials from former employers. These testimonials should discuss your suitability for citizenship, your work ethic, and your ability to support yourself as a citizen. Be sure to have several signed original copies of these documents in your files in case you need to present them to more than one official. Also secure any tax documents you may be missing from your employers.

3
Register for and take the Icelandic citizenship exam. This exam is administered twice a year, to demonstrate you have a working knowledge of the Icelandic language and the history of Iceland. If this test would somehow be unfair to you, due to disability or other mitigating factor, you should contact the Ministry of Justice and Human Rights, which will work with you on this issue.

4
Review any special requirements with the Ministry of Justice and Human Rights, and then present all necessary materials, such as the testimonials and tax records of your time in Iceland, to the ministry for review. Retain copies of these documents in case you need to present them again. It may take several months before you hear from the Ministry.

Good luck lol.

reply to post by Senduko

I think I liked it better when I didn't know the precise details. I can always lie to myself and tell myself it's easy enough that even I could do it.....until learning that I really can't. The time issue, if nothing else. Ouch... It's fair and I don't fault them a bit, but from the side of someone looking? Ouch indeed.

Thanks for taking the moment to actually post that. I sure hadn't expected a reply and was legitimately curious on it. It's appreciated.

It is an interesting proposition in how to better stabilize the global economy and better than the trillion dollar coin idea. People with large stores of wealth will be better off investing it in other institutions than banks, reducing the banks access to capital but since the banks are backed by the government and capable of producing money from nothing it is not too much concern for the large central financial systems, the smaller banks may have some problems.

In terms of all these growing debt problems it will provide a guarantee that these large and out of control debt issues can be paid off, even if nothing is done by the debtors to address their debts. How it will affect the current status quo is that it will shift more financial power to the banks and those able to provide these loans while taking this power away from the wealthy and those with the capital.

I expect such a plan to cause huge political chaos as a lot of influential self interest will be affected as the ability to capitalize from the debts of others and further increase the pain and risks of default from those stuck in debt. As for how any such implementations will go will need a lot of through research and investigation as it is human nature to be greedy and any flaws or weakness will be exploited.

As a general principle I do give it some credit and and idea worth exploring further. Done right and it can help level the playing field, done wrong and the mess we are in will just keep on growing.

So wait, insanity step one was bailing out the banks instead of the people. So the banks kept their money on the books to fight off their ridiculous leveraging (conning). Insanity step two is incentivizing them to put that money into circulation, creating more public debt, and inflation in the money supply.

None of this works, unless there's an ulterior agenda. I posit that all of these policies are to hide the fact that we're falling off an ecological cliff. That we've simply stripped the earth of her nature beauty, and easily attainable goods. I reason that these policies are but a controlled demolition of civilization as we know it, in order to save ourselves from committing collective suicide.

Either there's sense to be made of this, or they're clueless.

reply to post by Power_Semi


this is the madness you get when

debt equals money.

Might want to take some of that cash and buy something real that is vital to existence before the cash is as worthless as the paper its printed on.

MOTF!

Originally posted by crankyoldman
INSANITY!

Ponder what is being said here:

The BOE is saying the only way to solve the problem of too much debt is to PUT PEOPLE IN DEEPER DEBT! - INSANITY!!!

The BOE, which has created the problems in the first place, is offering a solution the problems they themselves created! - INSANITY!!!

The BOE does NOT loan out it's cash, it uses it's cash to PRINT money based on the cash it holds, along the order of 1000-1, so the BOE is saying the best way to solve a problem is to LEVERAGE the cash/deposit itself by forcing banks into LOANING IT OUT! - INSANITY!

The BOE is saying, "the way to solve the problem we have created, though the insane exploitation of the thoroughly reprehensible fiat currency system is to simply put everyone deeper into debt, thereby creating a greater need for our product - debt notes, thereby solving our problem." INSANITY, INSANITY.

Now, the only caveat I would add is that in a closed fiat currency system, one that is not predicated on CDS, Naked Short Selling, leverage etc. they prospect is not totally without merit, but in the hands of the madmen who created this global casino reality where, BY LAW, all losses are handed down to the 99%, their suggestion is insanity. - INSANITY!

Remember, when a loan is printed by the BOE, the Compounded Interest is NOT printed. So, when you borrow 100, and owe 300 back, ask yourself; "where does the extra 200 come from?" - INSANITY!

Insanity indeed, the definition of insanity is repeatedly doing the same thing, and expecting a different result each time.

The only real way to beneficially stimulate an economy is to give the people money to spend, and to get the money flowing through the economy's veins, but unfortunately - taking the UK economy for example, the people whom you want to have spending money don't have it to spend!

Ordinary people, those who are working, are not spending because they fear for the security of their job. The whole market is depressed due to austerity measures that are being keenly felt. Of course, if you earn more than £30,000 a year, the likelihood of you suffering the same financial indignity as those who are not, is quite low. The 'throw-away' populace (anybody earning or living below the poverty line) are the real sufferers, they are the ones bearing the pain as if it were an administered unwanted medicine...and they don't even have a say in it.

For some reason, the financial elite crash the world's economies at times of their choosing every so often. They do it deliberately, following a purposeful agenda, and once they have achieved their goal, they slowly allow the economies to restimulate and grow again. However, those at or below the poverty line forever live in recession, there is no respite for them...ever!

I suppose in the end, if you have more money than what you need, you have very little incentive to care about those who don't. Your mindset will be such that you view them as alien to you, somehow less human and less deserving of capitalist society...the motto of which is "Be a slave or perish!"

As someone who used to work for the BOE I cant but think that its time for a new system to be looked into, after the old system isnt working anymore, its like putting a plaster on a severed arm and hope the bleeding stops.
The BoE is an old girl ( technically it calls itself ' the Old lady') isn't time to put her in a home to be looked after by people who know what's best for her and her families welfare or as a last resort send her to Sweden?

Putting negative-interest could work. It will reverse inflation.. Money supply will be drying up, thus money will be come worth more again. So your wages will go up in value. Your general savings would as well.. if the retail banks tried to pass on negative interest to customers, customers could just withdraw all their cash... Then their money will go up in value...

This is gold.

Does that mean banks would pay you to lend you money....?

The money economy is artificial. You get paper that represents something else. Screw sound money, whats important is that the underlying real economy works, that goods and services are swapped, not that money lying around doing nothing grows magically in value.