Negative interest rates, wheres the consideration?

[McDuck]

So, you've probably all heard about negative interest rates.

And you've probably also heard lots of nonsense about it.
The one thing you can depend on, is that the banking system have been given time to adjust their computing systems to deal with negative numbers.

So.

How will it all work.
I have no idea.

Negative interest rates might simply be a tool between the Government and the Trading banks.
That shouldn't directly alter the way everyday people deal with their personal bank accounts.

But I wonder about this legal principle called "Consideration".
How can an agreement take place if both parties do not get some gain.
more specifically, how can a bank lend out your meager savings, if you are not paid for that risk or inconvenience in some way.

It's not a contactable situation.

Technically, you can go to .0000000000000000001 of a cent.
but negative?
Not so sure.

[Jeffa]

Personally as a greedy, self centered investor that has millions in leveraged debt across several asset classes I hope they go atleast negative 4%..
By then they will pay me comission to hold the debt.

Now if there was only something that could set of a "second wave " of interest rate cuts.

(I know..too much info)

What will put fear into the central bank's is if people give up or don't trust central banks and there currency.
All central banks have a horrific fear of alternative trading currency whether it be gold,cryptocurrency, silver, sea shells.

That's why I'm strongly of the belief the war on cash is a pre cursor to the creation of a single world (or western) currency.
C.B.D.C is what's being mentioned quite alot and what our bank's are preparing for.

Central Bank Digital Currency

But as for negative interest rates, it usually works only for the corporations (and me) with hundreds or billions worth of debt...your average retirees with term deposit accounts will be hit hard in their golden years.

That's why I have always referred to the central bank's as the beast.

Sorry Mcduck I tried really hard not to sound like a conspiracy theorist in this post!How did I do?

[artemis]

Talking to a friend yesterday who said in other countries it is achieved by a reduction in the principal amount to the borrower.

[McDuck]

Personally as a greedy, self centered investor that has millions in leveraged debt across several asset classes I hope they go atleast negative 4%.....

That's why I have always referred to the central bank's as the beast.

Sorry Mcduck I tried really hard not to sound like a conspiracy theorist in this post!How did I do?

You did pretty good.

I recently browsed over the book of revelations, you know, to get a better feel for it's contents.
My first thought was how unusual the literary style is, compared to the day to day practical language of the previous books.
It almost seems to match up with the old testament more.

So, how do you define a conspiracy?
(I'm very interested in any form of organizational structure).
So, for example:
Do water droplets conspire to form clouds?
Do the cells of your body conspire to all move around together and walk?
Do the people at a party all conspire to have a good time?

What is you way of defining a conspiracy?

[PC]

Technically, you can go to .0000000000000000001 of a cent.
but negative?
Not so sure.

6 decimal places maybe. 0.000001.
Floating point maths has limitations even if the banks are running on 64 bit computers.

[Keys]

Just turned up in my email in box. Seems appropriate:

Reserve Bank supports global call to action on remittances

19 June 2020

The Reserve Bank of New Zealand is supporting a worldwide multi-stakeholder appeal to keep and improve migrants’ access to remittance or money transfer services during the current economic crisis brought about by the COVID-19 pandemic.
Led by the Governments of Switzerland and United Kingdom, the call to action highlights the impact of the COVID-19 pandemic to economies, communities, and families dependent on remittances. The World Bank predicts that remittances to low and middle-income countries will drop by about 20%.
To address this, the call to action has recommendations on policy, regulations, and service provision to ensure affordable access to money transfer services of migrants and their families. New Zealand, led by the Ministry of Foreign Affairs and Trade (MFAT), is one of the latest countries to join and pledge its support for the initiative.
Reserve Bank Governor Adrian Orr said, “Across the world, many migrants and their families who rely on remittances for basic needs are experiencing financial hardship because of COVID-19. We are committed to supporting this initiative to ensure that no one gets left behind in the economic recovery plan.”
“This is very much aligned with the current work that the Reserve Bank, with support from the MFAT, is engaged in. The Bank’s Pacific Remittances Project aims to address the challenges facing remittance services domestically and in the Pacific region.
“As early as last year, we have been working closely with the Government, the South Pacific Central Bank Governors’ forum, fellow regulators, and industry players to increase access to and reduce costs of remittances to and from the Pacific. Our work on this remains to be a priority, now more than ever,” Mr Orr said.

[Jeffa]

Yes I have a bank account in Vanuatu, its a great place to launder #@ I mean invest money. I think I was paying 15% transfer fees..Thanks Mr Orr!

[McDuck]

Just turned up in my email in box. Seems appropriate:

I was really surprised to see how many people come to get work in New Zealand and constantly send money back home to support their relatives.

I suppose with better electronic systems, and faster cheaper internet, the cost must come down.

This move seems in line with getting the cash to the end user, rather than having it chewed up in management overheads.

Were you worried about the monopolistic control of integrated electronic systems?

[McDuck]

6 decimal places maybe. 0.000001.
Floating point maths has limitations even if the banks are running on 64 bit computers.

Ha!
Does NZ ever talk in Trillions?
Maybe we're too small.
Billions seems to be our scale of things.
yup, GDP is about 20 Billion.
Whats that, ten to the power of nine?
So the system could easily go into negative billions.

This is a great way to visualize it , see link.

https://en.wikipedia.org/wiki/Power_of_10#/media/File:Visualisation_1_billion.svg