How are negative interest rates gonna work?? (transaction, debt, visa)

[BostonMike7]

Time to scoop up a little more gold/silver I guess.

[Lowexpectations]

If the fed set the fed funds rate negative, the fed would charge banks, not people for holding money with them. Banks then might charge customers for holding funds as well

[J.Thomas]

Originally Posted by Lowexpectations

If the fed set the fed funds rate negative, the fed would charge banks, not people for holding money with them. Banks then might charge customers for holding funds as well

This is already happening in Japan and some European countries.

Anyone can tell us if that's the case??

[LetsRock]

Originally Posted by J.Thomas

Yeah i know.

But what happens when i ask for credit

It should be negative or at least zero.

$100K for $100K right??

Nope. The bank is in the business of lending money for a profit. That means YOU will pay interest.

[Lowexpectations]

Originally Posted by J.Thomas

This is already happening in Japan and some European countries.

Anyone can tell us if that's the case??

Yes it is the case.

[J.Thomas]

Originally Posted by LetsRock

Nope. The bank is in the business of lending money for a profit. That means YOU will pay interest.

But this doesn't make any sense??

Banks will charge for parking money and lend for profit.

That means double profits on both sides??

How is it gonna work for economic growth

[Lowexpectations]

Originally Posted by J.Thomas

But this doesn't make any sense??

Banks will charge for parking money and lend for profit.

That means double profits on both sides??

How is it gonna work for economic growth

You've described the theory on exactly how it would work. Forcing the cash to work instead of sitting in the bank

[J.Thomas]

Originally Posted by Lowexpectations

You've described the theory on exactly how it would work. Forcing the cash to work instead of sitting in the bank

But would anyone park their savings??

[Lowexpectations]

Originally Posted by J.Thomas

But would anyone park their savings??

No and that's the point.

[J.Thomas]

Originally Posted by Lowexpectations

No and that's the point.

How about bonds and treasuries??

They are headed to negatives.

Why people are buying these