Community Chat

[hckynutjohn]

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@esmeraldagooch

What  would you do if your bank decided to charge you to deposit and hold your savings?

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Start putting it under our mattress.

hckynut(john)

[esmeraldagooch]

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@Maudelynn wrote:

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@esmeraldagooch wrote:

@Maudelynn wrote:

The article states this is a tactic being considered by the european central bank (similar to our Federal Reserve).  The economy is bad enough in Europe that charging negative rates to banks (not customers) is thought to be an encouragement for banks to stop hoarding money and lend out their excess cash.  When banks hold onto money, they impede the economy.  Lending to small businesses and individuals helps the economy recover.

ETA:  Where and why was this discussed here in the US?

The Federal reserve:

A Fed official hinted at NIRP at their Sept 2015 meeting

Oct 9th Fed president BillDudley stating they were an option though not a relevent conversation right now.This statement was followed up by Minneapolis Fed President NarayanaKocherlakota stating point blank that the Fed should “consider negative rates.

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"though not a relevent conversation right now" are the key words.  Thanks so much for posting this.

Mentioning it three times in 60 days when most would think this was out of the question?  Yes, it do think it's relevant conversation to everyone.   

Many here have something in the bank and what happens if they all remove their deposits? Currency collapse. There is more money owed or owned than physical currency.

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[Maudelynn]

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@esmeraldagooch wrote:

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@Maudelynn wrote:

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@esmeraldagooch wrote:

@Maudelynn wrote:

The article states this is a tactic being considered by the european central bank (similar to our Federal Reserve).  The economy is bad enough in Europe that charging negative rates to banks (not customers) is thought to be an encouragement for banks to stop hoarding money and lend out their excess cash.  When banks hold onto money, they impede the economy.  Lending to small businesses and individuals helps the economy recover.

ETA:  Where and why was this discussed here in the US?

The Federal reserve:

A Fed official hinted at NIRP at their Sept 2015 meeting

Oct 9th Fed president BillDudley stating they were an option though not a relevent conversation right now.This statement was followed up by Minneapolis Fed President NarayanaKocherlakota stating point blank that the Fed should “consider negative rates.

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"though not a relevent conversation right now" are the key words.  Thanks so much for posting this.

Mentioning it three times in 60 days when most would think this was out of the question?  Yes, it do think it's relevant conversation to everyone.   

Many here have something in the bank and what happens if they all remove their deposits? Currency collapse. There is more money owed or owned than physical currency.

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@esmeraldagooch wrote:

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@Maudelynn wrote:

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@esmeraldagooch wrote:

@Maudelynn wrote:

The article states this is a tactic being considered by the european central bank (similar to our Federal Reserve).  The economy is bad enough in Europe that charging negative rates to banks (not customers) is thought to be an encouragement for banks to stop hoarding money and lend out their excess cash.  When banks hold onto money, they impede the economy.  Lending to small businesses and individuals helps the economy recover.

ETA:  Where and why was this discussed here in the US?

The Federal reserve:

A Fed official hinted at NIRP at their Sept 2015 meeting

Oct 9th Fed president BillDudley stating they were an option though not a relevent conversation right now.This statement was followed up by Minneapolis Fed President NarayanaKocherlakota stating point blank that the Fed should “consider negative rates.

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"though not a relevent conversation right now" are the key words.  Thanks so much for posting this.

Mentioning it three times in 60 days when most would think this was out of the question?  Yes, it do think it's relevant conversation to everyone.   

Many here have something in the bank and what happens if they all remove their deposits? Currency collapse. There is more money owed or owned than physical currency.

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You may think it's relevant, but the New York Fed chief does not. If you read the article you linked, negative interest rates are not charged to the customer, they are charged to BANKS. Your fears are not based on facts. You may want to re-read the article you posted.

[docsgirl]

I'm like151949 in that the bulk of my assets are in a brokerage account.  Despite the downturn in the markets of recent, I have a phenomenal financial advisor and we, as he likes to say, 'still beat the street.'  I keep a few thousand in my checking account and my Social Security and pension are deposited there.  That's my bill-paying $$$, tax $$$, insurance $$$, and fun-money.  It pays no interest which is OK with me as it's not in there for growth.   docsgirl

[esmeraldagooch]

Banks are paying some who take out loans now in NIRP countries.  They can't take that burden without charging depositors.  As always, thye little guy who is responsible looses.

http://www.npr.org/2015/04/14/399641297/when-rates-turn-negative-banks-pay-customers-to-borrow

[esmeraldagooch]

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@docsgirl wrote:

I'm like151949 in that the bulk of my assets are in a brokerage account.  Despite the downturn in the markets of recent, I have a phenomenal financial advisor and we, as he likes to say, 'still beat the street.'  I keep a few thousand in my checking account and my Social Security and pension are deposited there.  That's my bill-paying $$$, tax $$$, insurance $$$, and fun-money.  It pays no interest which is OK with me as it's not in there for growth.   docsgirl

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I personally am concerned as I just sold a home and don't want my funds in something that is locked up for a long period of time or could go down in value.   Very sad time for investors and retirees who are being hit hard.

[Maudelynn]

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@esmeraldagooch wrote:

Banks are paying some who take out loans now in NIRP countries.  They can't take that burden without charging depositors.  As always, thye little guy who is responsible looses.

http://www.npr.org/2015/04/14/399641297/when-rates-turn-negative-banks-pay-customers-to-borrow

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I understand now- you are thinking economic strength depends on savings rates- passbooks, short term cds, etc.  The economy is not boosted by money in savings.  You will not see high interest rates on no risk savings, unless we're in deep, deep trouble.

The economy partly depends on the cost to BORROW, since money borrowed by individuals and businesses in generally invested right back into the economy.  When it's cheaper to borrow, you have more growth.  This is the reason you're hearing about it in Europe.  It's not happening here.  Our economy is becoming more and more stabilized.

[151949]

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@docsgirl wrote:

I'm like151949 in that the bulk of my assets are in a brokerage account.  Despite the downturn in the markets of recent, I have a phenomenal financial advisor and we, as he likes to say, 'still beat the street.'  I keep a few thousand in my checking account and my Social Security and pension are deposited there.  That's my bill-paying $$$, tax $$$, insurance $$$, and fun-money.  It pays no interest which is OK with me as it's not in there for growth.   docsgirl

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Anyone keeping money in a savings acct these days expecting any significant growth is only fooling themselves, IMO. However, I would be very unhappy if they suddenly told me I had to pay them to keep it there. I would probably move it to a checking acct or maybe to a money market type acct.

[LilacTree]

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@hckynutjohn wrote:

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@esmeraldagooch

What  would you do if your bank decided to charge you to deposit and hold your savings?

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Start putting it under our mattress.

hckynut(john)

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LOL, John, I was just going to post that!!  Actually (and seriously) I know several individuals who are using fireproof/waterproof safes now.  They keep them well hidden and that's where all of their savings and valuables are stored.  

[esmeraldagooch]

Moments ago, the Bank of Canada's chief finally said what we had been patiently waiting for over the past several months: admission that Europe's experiment with negative rates is about to cross the Atlantic. From Market News:

http://www.zerohedge.com/news/2015-12-08/canada-just-hinted-negative-interest-rates-are-coming