Negative Interest Rates--BOJ

[RandomGuy]

http://www.bloomberg.com/news/articles/2016-01-29/yen-tumbles-more-than-2-as-boj-adopts-negative-interest-rates


The yen dropped the most in more than a year after Bank of Japan Governor Haruhiko Kuroda unexpectedly adopted negative interest rates, risking another round of competitive devaluations.
The currency fell against all 16 of its major peers after Japan’s central bank voted 5-4 to apply an interest rate of minus 0.1 percent to current accounts held at the central bank. The surprise move prompted Morgan Stanley to remove its yen trading strategies for now, according to a research note from the bank.

Um, Wow.

[boutons_deux]

lots of signs are negative recently

US growth was on 0.7% 4th qtr, durable goods down 5.1%, consumer spending up but so is consumer debt (debt-financed consumerism?), and http://www.advisorperspectives.com/dshort/updates/Big-Four-Economic-Indicators-IP

[angrydude]

Don't worry guys. They totally know what they're doing.

[Winehole23]

People are beginning to see the effects of central banks’ financial repression, even if they have not yet placed the blame squarely where it belongs.


The rise of extreme parties on the Left and Right and the Brexit vote are both direct consequences of failed central banks and government policies that benefit the wealthy at the expense of everyone else.


The rise in anger and the rise in the price of gold are also a direct result of an increased belief that central banks do not have everything under control.



https://mishtalk.com/2016/08/20/rbs-pays-negative-interest-on-deposits-starting-monday-postbank-to-charge-e3-9-per-month-negative-interest-roundup/

[Winehole23]

$10T pile: http://www.bloomberg.com/news/articles/2016-07-06/global-negative-yielding-bond-pile-nears-10-trillion-chart

[Winehole23]

Negative Deposit Roundup



UK – Royal Bank of Scotland: Negative interest rates on some large depositors start August 21. One million business customers notified. Rate not specified
Germany – Postbank: Postbank, a subsidiary of Deutsche Bank, will charge millions of depositors €3.9 per month starting November. “Vast majority” of Postbank’s 5.3 million giro account holders impacted.
Germany – Raiffeisen: German credit cooperative Raiffeisen announced it would begin applying negative rates on customer deposits in September. The policy applies to deposits in excess of 100,000 euros. The cooperative imposes a negative rate of -0.4%, the same rate the European Central Bank charges for ‘excess’ reserves held at the ECB.
Ireland – Ulster Bank: The Irish lender Ulster Bank, part of RBS, imposes negative rates on large corporations, but does not apply such charges to small businesses or individual customers.
Ireland – Bank of Ireland: The bank will charge large companies to hold their money on deposit, making it the first domestic Irish lender to impose negative interest rates. The bank, which is 14 per cent owned by the Irish government, has warned large corporations and institutions that it will charge 0.1 per cent for deposits above €10m starting October.
UK – HSBC. The multinational bank HSBC said last year it would start charging other banks for deposits held in currencies where negative interest rates apply.
Switzerland – Alternative Bank Schweiz AG: ABS informed its clients last year that they would have to pay a charge of at least 0.125% to maintain their accounts at the bank starting in 2016.

[CosmicCowboy]

What do all these economies have in common? An aging population, lower birth rate, reduced recruitment into the work force, and excessive debt. the US is right behind them.

[Winehole23]

All true, but that hardly covers it. It's a hangover from the epochal financial panic of 2007-9.

Deflationary headwinds, opaque asset classes, financialized economies that primarily extract value rather than investing in R&D, infrastructure and public goods such as education and health.

[Winehole23]

countercyclical monetary policy has pumped up the stock market to record levels. if you can't afford to invest, you pretty much got left behind by the so-called recovery.

[Splits]

What do all these economies have in common? An aging population, lower birth rate, reduced recruitment into the work force, and excessive debt. the US is right behind them.

Huh? Switzerland has a 68% labor participation rate, a balanced budget, and very low debt/GDP ratio.

[Winehole23]

nice catch