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Negative interest

Discussion in 'Central Banking & Fed Reserve' started by michael59, Mar 22, 2016.



  1. michael59

    michael59 heads up-butts down Platinum Bling

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    Some one needs to explain it to me. Just hold my hand (I know sick,) walk me down the path and when it looks like I bout got it kick me in the a$$ and yell "hunt er up."

    I just am not getting it at all. I mean we have irrational numbers, don't we? So I would think I could figure this out but it ain't working that way. For one I am dyslexic (some what,) which is the reason I bailed in electronics. I mean water and electricity are analogs of sorts yet when the switch is closed the electricity flows and when the tap is closed the water don't flow; so I bailed.

    Now here is this negative interest, and believe me, it don't compute. When I have ever computed interest it is always on the positive side of the number line, or on the right of zero. And, when I miscalculated it the only negative was my pocket book, but, the recalculated interest was still a positive. Now scientifically there is supposed to be negative irrational numbers to infinity to the left of zero as there is whole numbers and irrational numbers to the right of zero, to infinity. But I think scientifically this assumption is incorrect and I think the zero is just in the wrong spot.;

    Let me take gold. Now when counting gold or adding to it or taking away from an amount of gold the measurement used is a grain. Cool, so many grains equals a gram, then ounce and on and on. One can never go past the original starting point. I loan you one grain, your pay back of the consideration is one grain and a 1/4grain, which is gain on my part. For you to not meet the agreed obligation is a loss on my part to you, but still it is a positive to the right of zero.

    Now let me take the irrational negative numbers of gold on the left of zero. Say I take the weight of one atom of gold as consideration and loan it at 1/4 interest for my gain. This is still a positive at to me because the zero has just been moved to before what ever the atoms weight is as a place holder. This I can comprehend. Also scientifically to me this makes sense because even though them pesky nerds know what muons are and all the flavors of the quake are they also know the weight aka mass of them, yet they have been too lazy to move that zero/place holder to the left as of yet.

    And, this brings me to negative interest rates. I read about them yet understand them not. It's as if these financial guru's who pontificate about the world's finances are living in a different reality from me. It is about the same to me as holding a penny in my hand or a dollar and knowing I have actually nothing but because I hold it I owe it. Now I am not sure if that las sentence makes any kind of sense, but these negative interest rates really have me bamboozled.

    And, I think I just confused myself, also, on this subject. I am sure there are a lot more just like me, which is why I am posting about this subject. So do I have it right or have I been stuck on an empty tree for so long I need to be put on a lead and taken to the truck?
     
  2. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    Normal = the bank pays you the going interest rate for the use of your deposited funds

    Traditionally the Fed Reserve loosened (lowers short term rates) to encourage borrowing. This "stimulates" the economy because more activity takes place.

    Today's problem is they have loosened all the way down to effectively zero, free money, and people still won't borrow enough and/or the borrowing isnt stimulating anymore.

    By taking rates negative they think they can force activity. That people will think, I can't leave my money in the bank,it's shrinking, I have to put it in the economy to generate activity.

    However the smart man puts it into metal or property rather than putting it at risk
     
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  3. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    They want to force people to spend every cent they get the second they get it.
     
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  4. michael59

    michael59 heads up-butts down Platinum Bling

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    Haw, well if that is what a negative interest rate is then it is just a ploy and we are already screwed with blue tattoos.

    Speaking of metals, I just sent in an application for the up coming harvest. And, I might have poked the pooch when listing what I wanted under the compensation paragraph part. Hahahahaha, yep, I put one gold coin for every 120 hours depending on spot. I just could not help it.
     
  5. Professur

    Professur Midas Member Midas Member Site Supporter ++

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    Negative interest .. what the American public has for facts.
     
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  6. Uglytruth

    Uglytruth Gold Member Gold Chaser

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    What 62% or so of the US population not able to scrap together $500 cash what does it matter to them? Only the old & greedy rich will be loosing.

    But it does open an interesting question. If you have 10 million + dollars and don't want to put at risk in the market, don't want to buy land due to taxes, don't want to buy anything like PM because the price is manipulated or worried about taxes or gains or confiscation or whatever just what do you do with it. If you have 100K and loose 1/2% a year that's $500 or $41.66 a month loss....... grumble grumble grumble but if you have 10 mil that's 50K + & just that number pisses you off and you have to do something. What do you do at that point. They are really pushing to force your hand.
     
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  7. michael59

    michael59 heads up-butts down Platinum Bling

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    Ok, I get it...we arnt f'd....they are....what a greedy bunch of poop.

    So negative interest is a sob story.....makes sense.
     
  8. michael59

    michael59 heads up-butts down Platinum Bling

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    They are beating the bushes to flush out the prey. I gets it.
     
  9. Fiat Metaler

    Fiat Metaler Gold Member Gold Chaser

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    this is the key to understanding it.

    They = those who create money out of thin air. they have hit the point where no one wants it anymore, at least not enough to sustain the debt burdens or to take on more debt.

    if they can ramp up velocity, the machine starts humming again.

    they have currently reached a practical limit of debt and are trying to transcend that limit.
     
  10. michael59

    michael59 heads up-butts down Platinum Bling

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    Thing is Flat Metaler the accounting of the said monies is fictional. It's not like my million dollars is sitting in the vault. Even if they did have it handy and just loaned it all out by me being driven to flush it out to be used so I don't lose it because of their say so is mystifying to me.

    IDk, every time I think of what goes on in financial markets and stuff I am left scratching my head in a cycloptic wonderment.

    Let's say that the gumbeyment decided my car needed to be retired, kind of like what they did with the light bulbs. So the negatived interested me by raising the licensing fee by blue book value of 100%…

    So I cannot afford my car anymore and neither can you so i scrap it out. Fine I had a car now I have fake money to spend. Now that is velocity in action. Something taxed out of existence to make something come into existence, whether I like it or not. How is this going to be beneficial with fictional value when it don't exist in the first place?
    Ugly truth and professor kind of had me straightened out and you come along and damm now I'm in a tailspin again.

    Yeah, I'm plenty sure there are a lot more people just like me who don't understand this negative interest thingy.

    But I do think something wicked this way comes because China's economy has bombed and they are going to pay their loans off by producing cheaper stuff then there is that trillion defaulted on derivative/loans dushbagbank sold three New York banks that will default again and of course you and I will pay that off for them. Then we have the stupid witch that wants to tax weapons by 50% of value and who knows if it is new or used or all......

    Yeah, something wicked this way comes.
     
  11. michael59

    michael59 heads up-butts down Platinum Bling

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  12. Fiat Metaler

    Fiat Metaler Gold Member Gold Chaser

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    its not the money they want you to spend so much as the creation of even more debt.

    just take something like housing. if prices stay level, then eventually debt slowly comes down. they need prices continually going up, if even slightly, for the debt machine to move forward.
     
  13. michael59

    michael59 heads up-butts down Platinum Bling

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    IDK, a while back, like way b4 I ever hered of GIM, I was asked by the second in command (g friends first five,) why the prices of cars kept going up? I told him that they keep retooling and that retooling has engineers involved then there is the stamp for the fenders, then there is the electronics with the wire harness and a whole bunch of other things....So, dude needs to borrow some money to accomplish this just so he can sell a car and stay in buzy-Ness. Now,dude has to pay the gain on the loan so the price of the car (just one,) goes up. Now where does that gain come from, why it is printed, based on nothing. This much I knew.

    What I never figured on was negative interest, which to me was why I didn't go to school dances, or go out for the team....but no, now it has something to do with value....and this mistifies me because if you are playing the game of gain then there is no negatives unless some one pokes the pooch.....and then ny banks purchase stuff valued at 1T already poked pooches. Yep, already showed no gain but we'll purchase them anyways.

    And, FlatMetaler....I have instructed all the not so rugrats anymore that save your monies, and pay a mortgage but don't pay rent, make some one else pay your rent(oppose) your mortgage....

    Well I b rambling now do to a major influx of noodles.....Yep brain disengaged and coasting down the hill of sanity in to oblivion....

    Ta-ta and tootule-loo....what ever that is...Hahaha. later gator.
     
  14. Goodygold

    Goodygold New Member

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    I agree the system seems to be against the little guy. Maybe you could buy assets outside the banking system? Bitcoin is one idea but is new, unproven, and volatile. Real estate without a mortgage could work but who wants to forgo the deductions on mortgage interest? Gold stored outside the banking system, without any intermediation and counterparty risks (government confiscation, bankruptcy risks…) might be a good portfolio insurance.
     
  15. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    [QUOTE="

    But it does open an interesting question. If you have 10 million + dollars and don't want to put at risk in the market, don't want to buy land due to taxes, don't want to buy anything like PM because the price is manipulated or worried about taxes or gains or confiscation or whatever just what do you do with it. If you have 100K and loose 1/2% a year that's $500 or $41.66 a month loss....... grumble grumble grumble but if you have 10 mil that's 50K + & just that number pisses you off and you have to do something. What do you do at that point. They are really pushing to force your hand.[/QUOTE]

    You could become a mini soros and finance a small army in a backwater 3rd world country and then move there after the war is over and appoint yourself dictator for life. So long as your army has plenty of food and hookers at their disposal and a warm dry place to sleep they will remain loyal.
     
  16. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    It means they will charge such exorbitant fees so as people will not keep large sums idle in bank accounts.
     

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