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Thread: Negative deposit rate coming?

  1. #1
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    Default Negative deposit rate coming?

    *DRAGHI SAYS ECB HAS OPEN MIND ON NEGATIVE DEPOSIT RATE
    *DRAGHI SAYS WILL COPE WITH NEGATIVE CONSEQUENCES IF WE ACT



    remembering Bey Hua Heng
    Ride at your own risk !!!

  2. #2
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    i think this is definitely possible.....they are running out of ideas and tell u just to spend more to create job!
    置之死地而后生

    Quote Originally Posted by phantom_opera
    *DRAGHI SAYS ECB HAS OPEN MIND ON NEGATIVE DEPOSIT RATE
    *DRAGHI SAYS WILL COPE WITH NEGATIVE CONSEQUENCES IF WE ACT



    remembering Bey Hua Heng

  3. #3
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    negative interest rates may cause the stock market in europe and maybe globally to cheong more...

  4. #4
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    Will property here follow too?

  5. #5
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    what they are talking about is negative deposit rates, not negative loans rates lah

    anyway, if your deposits is just little bit, after service charges is effectively a negative interest rate.

  6. #6
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    Why put money in the banks if the rates are negative and risk bank closure? might as well roll it up and put in biscuit tins
    When you have eliminate the impossible, whatever remains, however improbable, must be the truth

  7. #7
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    The value lifespan of money is getting shorter. Your 1 dollar today, may only worth 90 cents tomorrow. Money is becoming a perishable commodity. Its expiry date is getting shorter and shorter.

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    China Chinese has flown all the way to Singapore to buy gold.

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    With the economy the way it is now, nobody dare to have many children anymore. The world population will shrink, especially in the western world. As the western world become "japanised" the economy growth will stalled at best if not collapsing.

    This is not what we want, but this is what we have to face. The western countries are struggling with deflating assets, that's why they keep inflating with QE. The asians countries, especially china are at their door steps waiting to buy out american and europen assets. This is not a war of the common people, this is a war of the elites. Both sides don't care if the common folks like u and me will be the casualties.

  10. #10
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    actually sg so safe, can keep all ur cash at home. say 10-20k just in case. rest all put in instruments la. unless mkt collapse all tx blocked... ur few hundreds k cash stuck in them. if u have more than that i trust it would have been vested in pptys.

    go out just bring enough 200-300. emergency shopping just pay with credit card.

    why keep a savings account??
    click: 🏢shoeboxmickeymousehouse 🏢

  11. #11
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    Quote Originally Posted by sherlock
    Why put money in the banks if the rates are negative and risk bank closure? might as well roll it up and put in biscuit tins
    but buy a biscuit tin first!

  12. #12
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    buy gold biscuits!
    “Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity.”
    ― Martin Luther King, Jr.

    OUT WITH THE SHIT TRASH

    https://www.facebook.com/shutdowntrs

  13. #13
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    America and its allies (europe, japan) are fighting an "economic vietnam war'. So far their massive bombing of QE fail to destroy their enemy's competitiveness.

    They have underestimated the guerilla tactic of their enemy in the past. Their enemy cheap products has successfully penetrate their market and kill off their manufacturing sectors.

    Now they are sending Rambo (aka ben bernake) to raise the cost of manufacturing in China, Bangladesh, India, Indonesia, etc. Fair play aside, the recent Bangladesh building collapse that kill many garment workers, certainly raise a suspicion of unfair play.

  14. #14
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    GUNDLACH: Anyone Who Says Interest Rates Will Rise Soon Is 'Absolutely Wrong'
    Lance Roberts, Street Talk Live | May 3, 2013, 10:52 AM | 105 |

    REUTERS / Jessica Rinaldi
    Jeffrey Gundlach
    Lance Roberts

    “Quantitatve easing is NOT going away. Every major country is running a deficit. If they are all net borrowers then who is the lender? The central banks.** For this reason – QE is not going away for a long time.”
    QE programs will continue until such time that the Federal Reserve begins to see negative consequences.** However, up to this point as Ben Bernanke has clearly reiterated, there has been NO evidence of any negative consequences.
    Of course, Janet Yellen, who is a front runner for Bernanke’s replacement, also sees no negative impacts and says QE should be appropriate through at least 2025.**

    Rates will not rise with real HIGH unemployment. The unemployment (U-3) rates is a false measure of employment due to the high level of dropouts. All that really matters for the economy, and ultimately the bond market, is the labor force participation rate which is at the lowest level since the 80’s.
    Rates will not rise with median household incomes at the lowest level in 19 years.

    Rates will not rise as QE is all about funding the federal budget. if rates rise the budget will be blown and deficits will explode.

    Rates will not rise as it will kill any economic growth.** Housing, private investment and consumer borrowing all rely on low interest rates. If rates rise it is the end game for the economy.

    Despite what you may have heard – the reality is that rates will not rise any time soon. This is the liquidity trap the Fed has gotten itself into.

  15. #15
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    2025 i lao kok kok liao
    click: 🏢shoeboxmickeymousehouse 🏢

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    Quote Originally Posted by indomie
    With the economy the way it is now, nobody dare to have many children anymore. The world population will shrink, especially in the western world. As the western world become "japanised" the economy growth will stalled at best if not collapsing.

    This is not what we want, but this is what we have to face. The western countries are struggling with deflating assets, that's why they keep inflating with QE. The asians countries, especially china are at their door steps waiting to buy out american and europen assets. This is not a war of the common people, this is a war of the elites. Both sides don't care if the common folks like u and me will be the casualties.

    Thought the world population clock is indicating the world population is increasing daily , believe now over 6 billion homosapien on planet earth...
    The under developing and developing countries are having population growth whereas the developing countries are having population reduction.... Overall population still increase on planet earth. That is why some part of Mother Earth is sick today as it gets exploited by human every second by mining,toxic waste emission etc.....
    Mother Earth gets back by sea level rise, tsunami, typhoon etc... to send signal to us not harm it further or else we will bear the consequences either in this generation or next.....

  17. #17
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    The Real Impact of Quantitative Easing (Next to Nothing!)

    Today’s CPI release, showing that seasonally-adjusted prices fell in October, caused me to chuckle as I recollected all the gloom and doom forecasts linking Quantitative Easing and the government’s attempts to stimulate the macroeconomy to runaway inflation. While it would be foolish to assume that one data point proves that those predictions wrong, the facts remain that a) inflation continues to be very low and b) money growth can’t cause inflation, anyway.

    I have already discussed this at great length in two earlier Forbes.com posts:
    Money Growth Does Not Cause Inflation!
    What Actually Causes Inflation

    For that reason, I’ll give only a brief summary here. First off, the theory. It is a common misconception that increasing the money supply causes prices to rise. The idea is that it results in “too much money chasing too few goods.” But there are two problems with this simplistic approach. First off, it assumes zero change in the quantity of goods. If we were to, for example, double the money supply but also double the quantity of goods, then there would be no price change at all. In fact, prices could fall if the quantity of goods increased more than the money supply. As the whole point of Quantitative Easing and the government stimulus was to raise output and employment (because, for those who have not noticed, we have almost 14 million citizens looking for work), there is no reason to maintain the assumption of zero change in the quantity of goods. It makes no sense.

    Second and more fundamentally, the scenario described by those who are supporters of the money growth ==> inflation camp is, in a modern monetary economy, impossible. What they say occurs is that the central bank forces those in the economy to hold more cash than they really want. The means of ridding yourself of cash is to spend it which, if we assume that our economy is already at maximum capacity (which they accept as at least a long-run truth), only raises prices. Milton Friedman’s classic example is of a helicopter dropping money onto the citizens of an island. They were already holding as much cash as they wanted, so this surplus was rapidly spent. With no more goods to buy, inflation resulted (in precise proportion to the money supply increase).
    But the helicopter story was more than a convenient simplification, it represented a critical assumption without which the argument no longer makes sense. There must be, in the money growth ==> inflation model, a means of forcing people to hold more cash than they want. It must be possible to create an excess supply of money in the same way that we can make an excess supply of cupcakes. In the real world, the latter is obviously possible. Bakers can overestimate the demand for their product and make too many, driving down the average value of a cupcake in the same way that inflation lowers the value of money. How can an analogous process take place with respect to dollars? It cannot! There are two means by which money can be created: Federal Reserve purchases of government securities from the public or via loans from private banks (note that our fractional-reserve banking system allows the latter to creates brand new cash without any direct intervention from the central bank; I am ignoring Federal Reserve loans through the discount window as a minor factor, but everything below would apply equally). In either event, it is impossible to create money unless a corresponding demand already exists. The Federal Reserve cannot force anyone to sell a Treasury Bill, nor can a private bank force you to take out a loan. In that sense, the money supply is like the supply of haircuts. Barbers cannot stockpile extra ones during their slow hours and thus accidentally exceed the quantity demanded. Unless a customer wants a haircut, one cannot be produced. Likewise, unless agents in the economy desire an increase in the money supply, it cannot occur.
    Thus, the money growth ==> inflation argument is based on questionable premises. Unless we make patently false assumptions about the structure of the macroeconomy, what it says cannot really happen. It is therefore not surprising that we have very little evidence of runaway inflation today. Consider that over the 1980s, for example, money supply growth (measured as M2) averaged 8% per year, while inflation was 5.6%. Even as a detractor, I recognize the fact that we might not witness an exact one-to-one movement of the two, so this by itself is not damning to the theory (one must also take into account real GDP growth for reasons I will not explain here–again, this is covered more thoroughly in the entries linked above). Then, through the 1990s, the numbers were 4% for money growth and 3% for inflation. This, too, is not inconsistent with the money growth ==> inflation story (however, it is also not inconsistent with other theories, too, and ones that are more firmly grounded in how a modern capitalist economy truly operates!). Money growth slowed over the 1990s, and so did inflation. However, from 2000 to 2010, M2 rose by an average of 6% year, while inflation dropped below even the low 1990s level to 2.5% per annum. In fact, during the year of the second-highest money growth of the decade (2009), the CPI actually fell! Where is the hyperinflation?
    To be fair, those in the money growth ==> inflation camp argue that theirs is a long-run theory and that the inflation will occur…eventually. However, it is easy to forecast that it will rain some day and then assume credit when there is finally a shower. And the bigger problem still remains that their explanation is based on assumptions that fly in the face of how our financial system actually operates.

    All this is not to say that I am a fan of Quantitative Easing. I am most certainly not, but not because I think it will cause inflation. It is simply ineffective. Firms are not dying to invest, produce more output, and hire new workers if only interest rates would fall a bit more or banks had more reserves. They know darn well that the problem is insufficient demand for the goods and services they sell and thus no degree of reducing their costs (Quantitative Easing, tax cuts, deregulation, etc.) is going to induce them to expand operations. This will only occur if they can sell more, which will only be accomplished if we end this budget-balancing foolishness and increase the deficit and debt. As I have argued in many other posts in this blog, more government spending is our only solution right now and the long-run cost is minimal. This is one of few problems we face today that we could actually solve. For some reason, we are dead set on making it worse.

  18. #18
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    The fed action on the QE is not meant to stimulate the US economy. It is meant to inflate assets for the countries where demand are still strong in order to raise cost and weaken their competitiveness. The fed knows that QE will not create inflation in US domestic market because their demand is weak. QE meant to inflict inflation overseas where demand are strong. Japan and europe are joining in this global concerted effort to inflate the rest of the world assets. Becareful because this QE will never stop until american is getting back its competitiveness. They are more than ready to print to infinity.

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