- Jun 6, 2007
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People that are trying to influence the Federal Reserve Board to make negative interest rates are idiots that are pursuing an effort to hurt the U.S. economy. The only circumstances where a competent Central Bank should make negative interest rates is if Banks in their economy were not fulfilling their role of lending money when they received good loan applications meaning the applications appeared such that the Banks would get paid all the principal and interest due on the loan; negative interest rates than would be a penalty on the Banks to move them to fulfill their role. America doesn't have any situation like that today; so today America's Central Bank making negative interest rates would be a breach of their duty. A Central Bank has a duty to support the finances of their banks to help them be as well capitalized as possible, has a duty to police banks in so far as to get them to not lend irresponsibly to not lend where the borrower defaults and they don't get their money back and Central Banks have a duty to support and maintain the foundational tenets of capitalism one being that persons and entities that loan money to businesses get rewarded for that activity.
Central Banks making interest rates negative breach these duties because it produces the following outcomes. Central Banks charging commercial banks for keeping cash on reserve at the Central Bank makes the commercial banks weaker because it reduces their capital position. Central Banks penalizing commercial banks for keeping reserves with the Central Bank creates undesirable and troubling pressure on the Commercial Banks to loan money risking putting them in a position where they make bad loans and for a commercial bank such can be catastrophic for that bank because they can lose the capital needed to operate as a bank. The Central Bank making negative interest rates makes their economy an Alice in Wonderland economy where up is down and everything is backward it stabs a knife into the heart of a capitalist economy it throws out this message widespread the economy is in a grave crisis mode the economy has mega problems!
Central Banks that pursue negative interest rates are trying to do to much they're trying to make up for the sins of the Executive and Legislative Branch of government and they cannot do it they are striving for a "bridge too far". On a personal note all these Central Banks in the West either being tempted with negative interest rates or actually pursuing them is largely due to the evil economic model of globalization. It is pure unadulterated evil, Globalization, how it has destroyed towns, families and individuals by offshoring manufacturing to other countries for what our world considers the almighty and glorious dollar. If individual countries governments did not keep betting and losing the house which globalization has got them into then countries would have stronger economic bases because they would have stronger production bases making things that the country needs and is priced at that supports good middle class jobs producing. Returning countries back to robust production economies would reduce the pressure on Central Banks to do crazy things like make negative interest rates to increase GDP, increase employment and increase inflation to good rates!
Central Banks making interest rates negative breach these duties because it produces the following outcomes. Central Banks charging commercial banks for keeping cash on reserve at the Central Bank makes the commercial banks weaker because it reduces their capital position. Central Banks penalizing commercial banks for keeping reserves with the Central Bank creates undesirable and troubling pressure on the Commercial Banks to loan money risking putting them in a position where they make bad loans and for a commercial bank such can be catastrophic for that bank because they can lose the capital needed to operate as a bank. The Central Bank making negative interest rates makes their economy an Alice in Wonderland economy where up is down and everything is backward it stabs a knife into the heart of a capitalist economy it throws out this message widespread the economy is in a grave crisis mode the economy has mega problems!
Central Banks that pursue negative interest rates are trying to do to much they're trying to make up for the sins of the Executive and Legislative Branch of government and they cannot do it they are striving for a "bridge too far". On a personal note all these Central Banks in the West either being tempted with negative interest rates or actually pursuing them is largely due to the evil economic model of globalization. It is pure unadulterated evil, Globalization, how it has destroyed towns, families and individuals by offshoring manufacturing to other countries for what our world considers the almighty and glorious dollar. If individual countries governments did not keep betting and losing the house which globalization has got them into then countries would have stronger economic bases because they would have stronger production bases making things that the country needs and is priced at that supports good middle class jobs producing. Returning countries back to robust production economies would reduce the pressure on Central Banks to do crazy things like make negative interest rates to increase GDP, increase employment and increase inflation to good rates!
