The new regressive tax coming at you.

[SnakeBoy]

I still don’t conceptually understand negative interest rates. I know the fed can simply cut rates until they’re negative, but when would you ever loan someone $10 expecting to get back $9.50 in a year?

The negative interest rate won't apply to money you borrow, just the money you deposit

https://www.investopedia.com/terms/n...ould...%20More

In 2014, the European Central Bank (ECB) ins uted a negative interest rate that only applied to bank deposits intended to prevent the Eurozone from falling into a deflationary spiral.

[Will Hunting]

The negative interest rate won't apply to money you borrow, just the money you deposit

https://www.investopedia.com/terms/n...ould...%20More

At one point (not sure if they still do) Europe had negative LIBOR rates. Theoretically that means banks were willing to lend money to other banks at negative rates. Either that or LIBOR pricing is completely rigged

[pgardn]

I still don’t conceptually understand negative interest rates. I know the fed can simply cut rates until they’re negative, but when would you ever loan someone $10 expecting to get back $9.50 in a year?

If you thought the $10 was not safe under your bed Im guessing. I know drug guys put a lot of money (cash) into things that were actually worth a whole lot less just because they could not keep that much cash safe. They could not get it into banks. I guess this is sort of the same idea?

[ElNono]

My guess

tbh

[ElNono]

We never stopped being in a deflationary economy. The Fed briefly thought it could rollback QE and raise interest rates under Trump but quickly reversed course. I think we are far more likely to see negative interest rates than inflation over the next couple of years.

When do we reach the point that central banks run out of ammo to artificially inflate the economy? I have no idea but we seem determined to find out.

Not really true. We've been on positive GDP growth for a number of years. Heck, Trump fans made sure to remind us when the going was good.

We will see deflation and stagnation again now that the economy shrunk until the pandemic is in control. Negative interest rates make no sense from a monetarist policy angle.

What you'll see is stimulus, either via another QE program, etc. This is probably why Yellen is bringing it up.

That said, unlike '08 when a dirty bubble popped, this was caused by a temporary emergency, not a bad economic indicator.

It doesn't mean we're going to go directly back to how things were, because this pandemic also introduced new ideas like how many people can WFH and still be productive, but should be a softer landing.

[Bogie]

Talk about regurgitated talking points.

Around 1980 manufacturing made up 25% of overall employment, today the latest stats show it at around 10%

At that time 20 million people were employed in manufacturing, today it’s half that. 25% of the workforce were employed in those jobs, now it’s at 10%.

part of that was automation, and part of that was companies moving jobs overseas. overall output in that time went from about 8 billion to nearly 25 billion.

Companies used the threat of employment, to choke down wages, and lower costs. Doesn’t mean that manufacturing is alive and well in this country.

[CosmicCowboy]

Talk about regurgitated talking points.

Around 1980 manufacturing made up 25% of overall employment, today the latest stats show it at around 10%

At that time 20 million people were employed in manufacturing, today it’s half that. 25% of the workforce were employed in those jobs, now it’s at 10%.

part of that was automation, and part of that was companies moving jobs overseas. overall output in that time went from about 8 billion to nearly 25 billion.

Companies used the threat of employment, to choke down wages, and lower costs. Doesn’t mean that manufacturing is alive and well in this country.

You just realized its a global economy?

[Bogie]

You just realized its a global economy?

knew that before. But trying to pretend that “richers” are investing in capital, like they’re some sort of noble class, is where you started with this.

you were wrong. Look at the statistics on wealth in this country. I don’t begrudge you a penny of your money. I don’t begrudge them a penny of their money.

but that money being used to choke off the money cycle at the very top, that should be something everyone has a problem with.

what’s the definition of economics?

[Winehole23]

Yellen just spelled it out. "Let the market determine the value of the dollar". US governments since the 90s have backed a strong dollar. Now we won't (ironically something Trump wanted). Hedge funds are all shorting the dollar. Its already at 2 year lows and will continue to decline. Bottom line? Your paycheck will buy less.

[Winehole23]

[Winehole23]

Yellen related:

Scoop: Yellen wants business to help foot infrastructure bill